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Work on Bolivia-Argentina pipeline to start in Oct
REUTERS
LA PAZ
Petroleumworld.com 03 28 07Construction of a $1.9 billion pipeline that Bolivia says will quadruple its natural gas exports to neighboring Argentina will begin in October, the Bolivian government said on Monday.
Bolivia agreed late last year to increase natural gas exports to Argentina from the current maximum of 7.7 million cubic meters a day over a 20-year period starting in 2010.
"This project marks the restarting of investments," Bolivian Energy Minister Carlos Villegas said in the eastern city of Santa Cruz after agreeing with Argentine Planning Minister Julio de Vido on a time frame for the project.
Foreign energy companies with operations in Bolivia put big-scale investment plans on hold last year after leftist President Evo Morales nationalized the energy industry.
According to local media reports, both ministers said they hope the 940-mile (1,500 km) pipeline will start operation before the end of 2009.In June, Argentina agreed to pay $5 per million British thermal units for the Bolivian natural gas -- or nearly 50 percent more than what it had been paying. Villegas said this price will attract energy companies to invest in the pipeline and related infrastructure.
Energy majors Repsol-YPF (REP.MC: Quote, Profile , Research) and Total (TOTF.PA: Quote, Profile , Research) said recently they need to invest at least $1 billion to meet the export contract with Argentina.
According to the time frame agreed between the two countries, engineering work would be finished in May, and the bidding process would take place in June so that construction work can start in October.
Bolivia's energy nationalization has been hampered by a series of setbacks and delays that experts blame on the lack of technical expertise and funds at state energy company YPFB.
President Morales sacked the head of YPFB on Friday, after outgoing president Manuel Morales Olivera took the blame for a string of mistakes in the contracts signed by energy companies to comply with the government's nationalization plan.
Morales took office 14 months ago on promises to tighten state control of Bolivia's plentiful natural resources and spread energy income to the indigenous majority in South America's poorest country.
Bolivia has 47 trillion cubic feet of proven and probable natural gas reserves, the second-largest deposits of the fossil fuel in South America after Venezuela.
REUTERS 26 03 07
Copyright© 2007 REUTERS. All Rights Reserved.
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