Skanska to Build New Pipeline for Petrobras

---

Researched by Industrial Info Resources (Sugar Land, Texas). Skanska AB of Sweden (NYSE:SKABh ) has been awarded a contract to build a gas pipeline for a subsidiary of Brazil’s Petrobras known as Transportadora Urucu-Manaus. The work will be performed through one of Skanska AB’s most profitable business units, Skanska Latin America. It is a $206 million investment for the construction of a new section of a natural gas pipeline between the oil and gas fields of Urucu and the oil deficient area of Manaus, both of which are areas within the Amazonas Province of Brazil. This new development will allow the pipeline to transport 4.7 million cubic meters of natural gas daily. The project will start immediately and will be completed in approximately 21 months so that operations can commence by early 2008.

Skanska, along with the Brazilian construction company Camargo Correa, who specializes in pipeline construction, will accomplish the pipeline project through the joint venture group Gasoduto Amazonia Consortium.

Managerially, the pipeline is divided into three segments known as A1, B1, and B2. Skanska owns 50% of the overall shares, which amounts to $103 million, and will be constructing the 186-kilometer B2 segment of the Anama and Manaus sector stretching from the Manacapuru Lake to the Reman refinery near the Negro River using 20-inch diameter gas pipe. The $143 million A1 segment of the pipeline will be developed by the OAS/Etesco Consortium of Sao Pablo, Brazil, and the B-1 portion is yet to be assigned. Preliminary work has already begun in the area and the construction of all three segments will start simultaneously, as Petrobras demanded.

Other Projects Within Petrobras

During November of 2005, the BNDES (National Bank of Economic and Social Development) granted Transportadora Urucu Manaus a $337 million loan to build the pipeline that will carry the natural gas produced in the oil-bearing province of Urucu to the Manaus province. At the same time, another development of a 285-kilometer long duct will be built to transport LPG (liquefied petroleum gas) between Urucu and a terminal in Solimões.

Urucu’s high-quality petroleum allows the production of derivates such as gasoline, diesel oil, and LPG. The Urucu-Manaus gas pipeline will allow the natural gas to reach Urucu and then be distributed to seven other municipalities in the Amazonas state: Coari, Codajás, Anamã, Anori, Caapiranga, Iranduba, and Manacapuru. The construction of this pipeline between Urucu and Manaos is a clear example of Petrobras’ interest on ensuring Brazil’s oil self-sufficiency, which was achieved in April 2006.

Industrial Info Resources (IIR) is a Marketing Information Service company that has been doing business for over 23 years. IIR is respected as the leader in providing comprehensive market intelligence pertaining to the industrial processing, heavy manufacturing, and energy-related industries throughout the world.