Bolivian Govt. & Companies Study Gas Pipeline Project

Bolivia's government and private companies are studying a project to export gas to Argentina through a proposed US$1bn pipeline to be built by Argentine construction group Techint, Bolivia's hydrocarbons ministry said in a statement.

The 1,500km pipeline, known as Gasoducto Noreste Argentino, is scheduled to start up in 2005. Initially it would transport 10 million cubic meters a day (mcm/d) from Bolivia, possibly rising later to 20mcm/d.

However, Argentina already has large gas reserves in the northwest, so Bolivia's gas will not be needed until these start to decline, Bolivia's hydrocarbons minister Alvaro Rios said on his return from a visit to Argentina.

He recommended that Bolivia wait until the Argentine market matures and gas rates are liberalized. Rates are currently frozen at their January 2002 pesofied level.

Bolivia has large gas reserves in the south of the country, where companies such as Argentina's Pluspetrol, which operates the Tacobo field, are interested in exporting, Rios said. The country has exported gas to Argentina for 29 years, but in quantities much less than the project would involve. The new pipeline is an opportunity to increase Bolivia's exports to Argentina as it has done to Brazil through the B2B pipeline, Rios said.

However, a senior associate at the Canadian Petroleum Institute (CPI) told BNamericas that Bolivia should be careful about how it regulates any new international gas pipelines. "Governments and regulators should be on the look out for people locking up an excessively high proportion of the available capacity and creating a monopoly which shouldn't be there," Roland Priddle said.

Brazil's state energy company Petrobras was the "only significant party, which had the financial wherewithal to make a long term commitment [to the B2B pipeline]" he said, adding that Petrobras has "locked up" the capacity. "A key feature is that if you want to have a functioning gas market, you need to have reasonable third party access to gas pipelines," he said. "That's contractual access, so when a pipeline is built there is an overriding regulatory interest in seeing to it that people who want to ship on it have equal opportunity to contract for capacity, and that did not happen with Bolivia-Brazil," he said.

Meanwhile, Argentina's President Nestor Kirchner expects to have a "profound dialogue" with his Bolivian counterpart Carlos Mesa during Mercosur's biannual meeting in Montevideo on December 16, Bolivian newspaper Editorial Opinion reported.

Argentina is anxious to establish an energy agenda with Bolivia that includes the new pipeline project, but will wait until Bolivia's holds a referendum on the gas export project in early 2004, the paper quoted Argentina's ambassador to Bolivia, Horacio Macedo, as saying.

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