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Argentina to send team to Bolivia for gas talks Friday
Platts
BUENOS AIRES
Petroleumworld.com 05 12 06
Argentina will send a team of energy officials to Bolivia Friday for
talks on natural gas prices and plans to step up imports, a government
official said Thursday. Planning minister Julio De Vido, Argentina's main
energy planner, will travel to Bolivia next week for further talks on the gas
situation, the official, a spokeswoman from the planning ministry, said."The commission won't only discuss pricing but it will review import
quantities," she said.Argentina wants to increase its gas imports from from Bolivia to around
20-mil cu m/d from the current 7.7-mil cu m/d under a 30-year deal. It has
been suffering shortages since 2004 as demand for gas, the source of half its
energy, rises while supply falls. Argentina's own production fell by 1.2% in
2005 from 2004 as producers failed to offset dwindling output at maturing
fields with new reserves.The main tension in the Argentina-Bolivia negotiations is expected to be
over pricing.Bolivian President Evo Morales, who announced the nationalization of the
country's oil and gas industry May 1, wants to raise gas export prices to
bring them more in line with international levels. In the US, for example, the
price of gas is between $7 and $8/MMBtu. Argentina pays nearly $3.20/MMBtu for
Bolivian gas, nearly double its average domestic price of $1.20/MMBtu.Higher prices from Bolivia could lead Argentina to reduce gas exports to
Chile and Uruguay, a strategy it has been following since energy shortages hit
in 2004. Of its 140-mil cu m/d gas production, Argentina consumes 120-130-mil
cu m/d and exports around 20-mil cu m/d, which leaves it increasingly reliant
on imports from Bolivia, its only foreign supplier.On April 21, Argentina and Bolivia signed an agreement to collaborate on
gas projects, including the construction of a $1-bil, 20-mil cu m/d pipeline
to deliver additional Bolivian gas to Argentina. Argentina also plans to help
Bolivia develop its gas industry by extending deliveries to more cities.For similar news, take a trial to Platts Oilgram News at
http://oilgramnews.platts.com.
Platts 11 05 06
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