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Argentina, Bolivia to sign natural gas pipeline deal
By Charles Newbery
Platts
Buenos Aires
Petroleumworld.com 08 10 06
Argentina and Bolivia will sign a deal in September for the construction
of a 1,200-kilometer (744-mile) pipeline to increase natural gas deliveries to
Argentina, Argentine Planning Minister Julio De Vido said Wednesday.A "definitive accord" will be signed, he told business leaders at a
conference in Buenos Aires.He said the 20 million cubic meters/d pipeline will cost $2.5 billion to
construct.The project will make it possible for Bolivia to increase gas exports to
Argentina to a maximum of 27.7 million cu m/d, up from a current 7.7 million,
helping alleviate a tight supply of energy that is threatening to slow the
Argentine economy.The countries agreed to the project in June as part of a wider deal
involving Bolivian increasing the price of its gas exports to $5/MMBtu from
$3.20/MMBtu for Argentina.Argentina's and Bolivia's state oil companies, Enarsa and YPFB,
respectively, are drafting blueprints for the pipeline, known as GNEA.Argentina's current gas imports from its northern neighbor meet 5-6% of
its average 120-130 million cu m/d demand for the fuel. It wants more gas to
keep pace with growing demand as the economy grows at 9% annual rate for a
fourth consecutive year.The demand growth is outpacing the replacement of domestic gas reserves,
which have been declining by about 10%/year since 2002 on lower exploration.
Gas production fell for the first time in more than a decade last year,
dropping 1.2% to an average of 141 million cu m/d.This has forced Argentina to cut back on its average 20 million cu m/d
gas exports to Brazil, Chile and Uruguay.As part of the Argentina-Bolivia deal, the countries also plan to jointly
build a natural gas liquids (NGLs) plant primarily to supply Bolivia. The
countries may also construct a gas-fired power plant to supply and carry out
joint ventures for the exploration and production of hydrocarbons in Bolivia.--Charles Newbery, newsdesk@platts.com
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Platts 09 08 06
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