Presidents of Bolivia, Brazil inaugurate $2 billion pipeline

PUERTO SUAREZ, Bolivia (AP) — The presidents of Bolivia and Brazil recently inaugurated a $2 billion natural gas pipeline between their countries. It is the largest investment project in Bolivian history and currently under way in South America.

“This is a historic moment for Brazil and Bolivia and for the integration of other Latin American countries,” Brazil’s President Fernando Henrique Cardoso said at a Feb. 9 ceremony near the border town of Puerto Suarez.

The pipeline took a little more than a year to build. More than a quarter century ago, then-Presidents Hugo Banzer of Bolivia and Ernesto Geisel of Brazil signed an agreement for the export of gas to Brazil.

Banzer, who was re-elected president in 1997, said that he was privileged to see the project get off the ground.

The pipeline extends 1,900 miles from Rio Grande, Bolivia, through Corumba, Brazil, to the cities of Sao Paulo, Curitiba and Porto Alegre. It is being administered by the Bolivian State Petroleum Co. YPFB, Petrobras S.A. from Brazil, and Gas Transboliviano S.A. Petrobras was in charge of construction in both countries. Also involved were Enron Corp. of Houston, Bechtel of San Francisco and Royal Dutch/Shell, the Anglo-Dutch oil and gas giant.

“With this project, Bolivia will become a regional center in the Southern Cone for the sale of natural gas for the entire region,” Banzer said.

Petrobras, the Brazilian oil and gas company, has agreed to buy 8 million cubic meters (282 million cubic feet) of natural gas a day for the first seven years of the 20-year supply contract. Afterward, the volume purchased increases to 16 million cubic meters (564 million cubic feet) a day.

Under terms of the agreement, Petrobras would pay for the gas even if it did not find buyers for it.