MercoPress. South Atlantic News Agency

Brazil: Oil new project in the Amazon jungle.

Brazil's state oil industry is extracting more natural gas and crude in the country's jungled north as part of a development program that is bringing investment and jobs on pipelines and at refineries, in the remote and left-behind region.

Two new oil pipelines, which will cost $678 million and span 960 kilometers (almost 600 miles) of jungle, are expected to make domestic, commercial and industrial use of natural gas popular in the Amazon states, which comprise a good portion of the country's territory, Petrobras officials said on Thursday.

The company expects to have the environmental permits by the end of the year, and then in 2004 it will begin the expansion of the first gas pipeline joining the jungle town of Coari with Manaus, the capital of Amazonas, said regional general manager Sven Wolff.

Another project, costing $298 million, will take 2 million cubic meters (70.5 million cubic feet) of gas from Urucu to Porto Velho, in the state of Acre, through 550 kilometers (340 miles) of jungle.

Both projects have drawn fire from Brazilian and foreign environmentalists, but Petrobras insists that it will keep their environmental impact to a minimum.

Covering 1.5 million square kilometers (almost 580,000 square miles), the largest Brazilian state is covered by one of the planet's last remaining virgin forests.

Its oil potential is less well-known, even though over the last 50 years, Petrobras has invested more than $5 billion in the oil industry there.

The company is trying to expand the use in Manaus of natural gas extracted from the Urucu fields, 650 kilometers (400 miles) to the southeast, which can be reached for just six months each year by air or navigable river.

A gas and oil pipeline, both of them more than 285 kilometers (177 miles) long, have been in operation since 1998, connecting the oil and gas fields to Coari, on the Solimoes River, from where the fuel is shipped to Manaus.

The expansion of the gas pipeline will enable it to convey up to 5 million cubic meters (176 million cubic feet) per day, which will generate up to 800 megawatts of electricity to meet the future demand of Amazonia's largest city, Petrobras said.

"We invested to meet that demand," Wolff told reporters during a recent visit to Petrobras' jungle facilities.

Petrobras invested $800 million in Urucu in recent years, with a view to supplying western Amazonia, which includes another three Brazilian states: Acre, Rondonia and Roraima.

The Urucu plant has the capacity to deliver to Manaus up to 10 million cubic meters (352 million cubic feet) of natural gas, Wolff said. Petrobras is also "seriously studying" the possibility of building a liquid gas plant in Manaus, he added.

This technology extracts gas by-products such as diesel fuel without any sulfur content, which are in great demand throughout the world.

Urucu is a type of Industrial Island where Petrobras now produces 59,000 barrels of valuable light crude per day.

Added to the natural gas, total daily production is the equivalent of 100,000 barrels of oil a day, making Amazonas the second largest fuel-producing state in Brazil.

Urucu has light oil reserves of 156 million barrels, sufficient to meet demand for 9.6 years at the current production rate.

It also has natural gas reserves of 110.8 billion cubic meters (3.8 trillion cubic feet), which put total hydrocarbon reserves at the equivalent of 853 million barrels of oil. The area contains sufficient gas to meet demand for 45 years at a production rate of 2 billion cubic meters a year and opens the prospect of both supplying the regional market and exporting.

"Every fried egg from Amazonas to Ceara (in the northeast) will be cooked with this gas," said the company's field production manager Mauro da Costa Mendes.