Bolivia agrees to sell more gas to Argentina under an ‘interruptible’ contract
Argentina and Bolivia signed on Wednesday new agreements to increase the sale of Bolivian natural gas to its southern neighbour but the controversial issue of a price review went unnoticed.
The documents were signed in the city of Cochabamba during the one day visit of President Cristina Fernandez to meet with her peer Evo Morales to address besides energy issues, bilateral relations and the current situation in the region.
The president of Bolivia’s government oil company YPBF, Carlos Villegas and Argentina’s Enarsa, Ezequiel Espinosa signed the “interruptible natural gas purchase and sale” contract with additional volumes.
Under the new wording Bolivia will export an extra six million cubic metres per day of gas in 2012 and 2013, but subject to the ‘interruptible’ clause meaning no side will be forced to pay fines if either of them does not comply with the deal.
Argentine Federal Planning minister Julio De Vido underlined the significance of the agreement since Bolivia has available gas and Argentina is completing a gas pipeline between the province of Salta and Buenos Aires.
Natural gas exports to Argentina jumped last May from 7 to 13.5 million cubic metres per day, mainly because a new processing plant built in Bolivia by a consortia headed by Spain’s Repsol.
Under the new clauses Argentina will purchase additional volumes of natural gas, besides the original contract which commands Bolivia to increase sustainedly shipments up to 27 million cubic metres per day by 2017.
De Vido and his counterpart Juan Jose Sosa signed an intention letter by which Enarsa will purchase propane, butane and liquefied gas beginning the second half of 2014. The sale of these fuels will become effective when Bolivia concludes the construction of two liquid natural gas splitting plants, which will also be exported to Brazil.
The Argentine president described the documents as “very important” and underlined the capacity of the Juana Azurduy pipeline that will have a capacity of 27 million cubic metres per day.
Regarding Bolivian natural gas prices Minister De Vido said that they were not part of the talks, “since there is no reason to modify accords signed by both governments with a parametric which enables to adjust costs every quarter taking into account a basket of international fuel prices”.
“There are no talks on modifying those accords”, underlined De Vido. “This gas has a buyer in Argentina: our manufacturing industries, residential areas among other sectors. Argentina will be a sustained and increasing consumer of Bolivian gas” he added.
Foreign ministers Hector Timerman and David Choquehuanca together with Bolivian communications minister Amanda Davila also signed other cooperation agreements in areas such as digital technology, university degrees, education, technology exchange, health and immigration.
Bolivian president Morales said the visit of his peer was significant and helped boost regional projects and to defend democracy. The country’s first indigenous president also criticized what he described as “the congressional coup” in Paraguay with the purpose of removing a popular and elected leader.
In the afternoon and before heading back to Argentina, Cristina Fernández visited the Heroínas de la Coronilla monument, a memorial to the women who fought the Spanish Empire in 1812.
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22 comments Feed
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Very wise, thinking ahead. The Argentine government tends not to pay what it owes. The Bolivians are obviously well aware of this. They still want that bit of Chile though, so they have to play with Argentina.
Producer: Shove a pipe down CFK's throat and another one up her ass. Plenty of gas there.
Bolivians are so dumb they should get over their themselves and sell to Chile before they lose Brazil as a client since the huge discoveries there. It doesn't do any good to have gas in the ground with nobody buying it.
But whatever it was,
BK wont be happy ??
.
Is it not the case that Argentina has significant natural gas reserves, 3rd largest in the world or something like that?
If this is the case and they are importing from Bolivia, that would imply that domestic consumption is greater than domestic production.
If this is the case, would it not be better to increase production rather than build a pipeline to Bolivia?
Help me out understanding this please.
There is no logic that would help you understand it.
It's just the Argentine way.
But, Condorito, you live in a logical world, with Kretina at the helm we live in a world of illusion.
In our world it's better to steal a company from the “wicked gallegos” who were going to invest US$3.5 billion in order to exploit the “Vaca Muerta” shale field, and then buy gas from Bolivia at a far higher cost than the consumers pay for it. This is the way we do business in Argentina.
I believe we have given up selling the Bolivian gas that we buy at international prices to you guys at a loss. That was another example of our brilliant leader's business sense!!!!
Because since CFK nationilsed YPF the government does not have the investment required 3.5 B USD a year to develop its own natural gas infrastructure. As I pointed out in my post above, YPF and hence the Argetnine governemnt have the resources just not the money to get at them. This was the folly of the nationilisation plan. It was designed to cut fuel import bills and it has only have the opposite effect.
What this sotry really says about CFK is she was wrong to nationalise YPF.
The real problem is China, under 8% growth the possibility of civil unrest grows exponentially. I think they are in for a hard landing, credit and housing bust and a long slow down. 100s of millions of starving peasants can't be kept down and kicked around forever!
alas, you dont have to pay it back,
some poor sod decades down the line gets caught, and the poor pay the price,
all bubbles burst, it just a matter of when, rather than where .
Just you understand, you may well be supporting the end of democracy in South America,
As we know it,
Then again, i could be wrong,
And together, they will become the greatest duo, since batman and robin. ??
How long can this situation be kept up?
Its ver kind of Kretina, but I'd rather pay what its worth and know that I'd have it forever, than pay next to nothing and suddenly find myself witout heating in Winter!!!!!
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