BRAZIL/BOLIVIA: Giant Gas Supply Project Set to Go-Ahead
LONDON, Dic 18 (IPS) - All outstanding details of a Bolivia-Brazil gas supply project will be settled "within the next two to three months", says Dr Luiz Costamilan, until recently the project manager for the Brazilian section of the pipeline.
Although a 'final' agreement was agreed several months ago, Bolivian President Gonzalo Sanchez de Lozado's signature was only secured when Brazilian state oil firm Petrobras agreed to re-open discussions over export volume and pipeline diameter.
Under the original contract, Bolivia planned to export eight million cubic metres of gas a day (cm/d) to Brazil, with this volume doubling in the seventh year of operations. Bolivia is now looking to boost initial volume by 50 per cent, to 12 million cm/d, and widen the pipeline diameter from 28 to 32 inches.
Whether these demands are accepted, says Costamilan, depends on "the parties strategic view on the future growth of the Brazilian market and the level of Bolivia's gas reserves". Both elements will show "if there is room for additional gas (from Bolivia)".
Petrobras has brought in an independent firm to evaluate the accuracy of Bolivian reserve estimates. Officials of the state oil and gas firm YPFB claim the country has 4.1 trillion cubic feet (cf) of proven reserves and 2.1 trillion cf of possible reserves.
Bolivia's current production capability is estimated at over 600 million cm/d, a figure that Costamilan called "pretty accurate". This suggests Brazil may agree to Bolivian calls for an increase in the initial flow of gas to Brazil. Under the current contract, Bolivia will supply 3.7 trillion cubic feet over a 20-year period.
The Bolivia-Brazil pipeline could mark the start of a new network of gas pipelines supplying the Brazilian market. Brazil's state oil firm Petrobras is currently stepping up its search for alternative suppliers to meet Brazil's long-term gas needs.
Natural gas supplies just two percent of Brazil's energy use, but this figure is set quadruple over the next 15 years. Domestic demand currently stands at 24 million cubic feet a day (cf/d), with just eight million cf/d produced in Brazil.
Most future supplies will come from Argentina and Peru, says Costamilan, assuming fresh Argentinian gas field discoveries.
"Although reserves are large, so too is domestic consumption," he said. "It would not be wise at this stage for Argentina to commit its reserves to export schemes."
© Inter Press Service (2014) — All Rights Reserved. Original source: Inter Press Service