Venezuela, Brazil and Argentina Agree to Begin New Gas Pipeline Project

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Reasearched by Industrialinfo.com (Industrial Information Resources, Incorporated; Houston, Texas). Presidents Luiz Inacio Lula da Silva (Brazil), Nèstor Kirchner (Argentina), and Hugo Chàvez (Venezuela) agreed in Brasilia, Brazil to accelerate the building of a nearly $20 billion gas pipeline spanning more than 8,000 kilometers (4,971.2 miles) connecting the three countries.

The project was launched during Mercosur’s summit last December, just as Venezuela entered Mercosur as a permanent member. The gas pipeline will start in southern Venezuela, traverse Brasil all the way to the north of Argentina, and end near Rio de la Plata, Argentina. The project will help Venezuela export its 100 billion cubic meters of daily gas production.

There will be a meeting again in March to go over the progress and future expectations that the project will entail. Chavez said that in the meeting they will present many of the technical aspects of the project. The building of the gas pipeline will require five to seven years. The March meeting will be hosted in Mendoza, Argentina, after which the leaders will attend the inauguration of Chile’s new president, Michelle Bachelet in Santiago, Chile.

Hugo Chàvez, alongside Da Silva and Kirchner, promised to launch the project in July of 2006 during another meeting in Venezuela (For details see related January 11, 2006 news article - Venezuela: The New Saudi Arabia). Specialists will be involved in environmental impact studies, certifying reserves, analysis of freight costs, and also the final price of gas in each of the consumption areas. Moreover, each country’s energy and petroleum officials are placing a high priority on studies related to the South American gas interconnection and interdependence.

Buenos Aires announced that there already is a signed letter of intention by Venezuela and Argentina to assess and certify the oil reserves in Cuenca del Orinoco, and investigate possible oil exploration in the offshore blocks of Golfo San Jorge near Chubut and Santa Cruz, Argentina. Argentina’s state-owned oil company, Enarsa, together with Repsol-YFP, Petrobras, and Venezuela’s PDVSA, willl participate in the assessment, certification, and evaluation of this offshore drilling project.

Bolivia’s Participation

During the summit, Da Silva, Kirchner, and Chàvez showed themselves satisfied with the election of Bolivia’s new president Evo Morales. They will work together with Bolivia to help the latter attain economic, social, and political stability. Morales reaffirmed his pledge to "recover" the country's natural resources by renationalizing the use of the resources.

What is more, Argentina´s government accepted Morales´ request to include his country in the giant gas pipeline being built between Venezuela and Argentina. For details see related January 10, 2006 news article – Argentina Looks to Bolivia After Abrupt Drop in Natural Gas Reserves.

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