MercoPress. South Atlantic News Agency

Political pipeline opens for natural gas network

The presidents of Brazil, Argentina and oil-rich Venezuela decided together here Thursday to push ahead with a Pharaonic project for a north-south continental gas pipeline seen as crucial to increased South American unity.

Agreement to move forward on building the conduit, which would extend some 8,000 kilometers (nearly 5,000 miles), came in a meeting President Luiz Inacio Lula da Silva hosted at his official residence with Argentina's Nestor Kirchner and Venezuela's Hugo Chavez.

"The political decision is made," said Chavez, the only one of the three leaders to address reporters after the gathering.

The idea emerged from talks Lula, Chavez and Kirchner held last month on the sidelines of a summit of the Mercosur trade bloc in Montevideo, and the Venezuelan said Thursday that work could begin on the pipeline as early as this year.

Chavez said the three heads of state will meet again next month in the Argentine city of Mendoza before traveling on to Santiago for the March 11 inauguration of Michelle Bachelet as president of Chile.

In Mendoza, Chavez said, he and his colleagues will review the first technical studies with an eye toward formally presenting the project to the public at a midyear event in Venezuela.

What Lula, Kirchner and Chavez dubbed the "great gas pipeline of the south" is intended to begin in southern Venezuela and traverse Brazil on the way to a terminal in northern Argentina, though the exact route has yet to be determined.

Chavez's ultimate goal is to pump Venezuela's average daily output of roughly 100 million cubic meters of natural gas - enough to supply almost all of South America - through a network of pipelines spanning the continent.

He said Thursday that he, Lula and Kirchner decided to invite all other countries in the region to take part in a broader initiative which envisions tapping the smaller but still significant gas reserves of Bolivia, Brazil, Argentina and Peru to achieve "energy independence" for South America.

The voluble Venezuelan president said the proposed web of pipelines will be accompanied by industrial projects to expand and diversify the use of natural gas.

Chavez urged setting a target of having the majority of vehicles in South America run on natural gas by the year 2020.

He denied that the prospective great southern pipeline represents an attempt to steal markets from Bolivia, which currently supplies natural gas to Brazil, Argentina and Uruguay.

"It's not a competing project, but a complementary one," Chavez said, asserting that South America has sufficient gas reserves "for the next 300 years," and touting the potential savings from reducing dependence on oil.

Venezuelan Energy Minister Rafael Ramirez said last week that the proposed southern pipeline would cost roughly $20 billion and could be completed in five to seven years.

Chavez told reporters Thursday that he and his counterparts also discussed matters related to Mercosur, a trade bloc that comprises Argentina, Brazil, Paraguay and Uruguay and which Venezuela is in the process of joining.

He said they talked about creating a "Bank of the South" as a regional alternative to the IMF and World Bank, and that they agreed to draw up a program for "immediate aid" to Bolivia, the continent's poorest nation.

Chavez said that he, Lula and Kirchner will put proposals on the table when they travel to La Paz for Sunday's inauguration of leftist Evo Morales as Bolivia's first Indian president.

The Venezuelan said his government will offer to provide Bolivia with asphalt for highway construction, while Argentina is prepared to supply medicines and vaccines to its Andean neighbor and Brazil will make low-interest loans available to La Paz.