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Brazil and Uruguay sign an energy integration agreement
PETROLEUMWORLD
QUITO
Petroleumworld.com 07 09 06
The ministers of Mines and Energy of Brazil, Silas Rondeau, and of Uruguay, Jorge Leptra, signed, on July 5th, at Petrobras' main office building, in Rio de Janeiro, a memorandum of understanding to advance the energy integration process between the two countries.On that same occasion, studies were commenced between Petrobras and the Uruguayan national oil company Ancap aiming at increasing the collaboration between the two countries in the oil exploration, production, and refining and in the natural gas areas.
Petrobras participates both in natural gas distribution, through the Conecta and Gaseba distributors, and in oil byproduct distribution in Uruguay. The Company is planning to develop studies and negotiations with Ancap to increase conversion at the La Teja refinery in order to process Brazilian heavy oil. The Uruguayan refinery, the only one in that country, is currently capable of processing 50,000 barrels of oil a day.
The Memorandum signed by the two ministries will give continuity to the previous understandings reached in the "Landmark Agreement on Regional Energy Complementation among the States that are Part of the Mercosur and Associated States," signed in Montevideo on December 9 2005, and in the "General Energy Interconnection Agreement between Brazil and Uruguay," signed last March 16.
According to the agreement that was signed today, Brazil and Uruguay take-on the commitment to conclude the studies to materialize the interconnection between San Carlos (Uruguay) and the Candiota region (Brazil). Each country will undertake studies on their systems and a deployment Commission will be created.
This agreement will result in the construction of a major 500-kV transmission line that will allow electricity exchange according to the need and capacity of both countries' electrical systems. The line will be about 400 km long and it is expected to be concluded 18 months after the construction work begins.
The costs involved in deploying the work required for the interconnection is estimated at $150 million. According to the agreement, Uruguay will bear the costs and be in charge of the project's technical and commercial management.
Minister Silas Rondeau highlighted the importance of the understandings between Brazil and Uruguay. "Regional development is determination of President Lula. The agreement we signed today is yet another step we take towards continuing the energy integration project in South America. Uruguay has always been our partner, and we will continue developing the region together," he said.
An Electric Interconnection Work Group, formed by three members of each country assigned by the respective Ministers, will examine the energy integration expansion between Brazil and Uruguay.
Petroleumworld 07 06 06
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