MercoPress. South Atlantic News Agency

China will help boost Brazil's gas distribution

Brazil's government owned company Petrobras and China's oil company Sinopec Group announced a 239 million US dollars contract to build a pipeline to increase natural gas supplies in the northeast of Brazil and reduce Brazilian dependence on gas from Bolivia

Petrobras said in a release this week that the agreement formed part of the first phase of the Southeast-Northeast Gas Pipeline Interconnection, or Gasene, project.

The contract for engineering, supply, construction and assembly of the pipeline, signed by Petrobras and Sinopec, allows 15 months for building a pipeline 28 inches in diameter capable of transporting 20 million cubic meters of natural gas per day.

The first 300-kilometer stretch will connect the town of Cabiunas in the north of Rio de Janeiro state with Vitoria, capital of the neighbouring state of Espiritu Santo. A second section of 125 kilometers under construction will link Vitoria with Cacimbas, and another of 765 kilometers, Cacimbas and Catu in the heavily populated state of Bahia.

According to Petrobras the Gasene project is essential for increasing transportation infrastructure and creating a nationwide market for natural gas.

The project will help overcome the energy deficit in the northeast and increase distribution of Bolivian imported gas and Brazilian produced gas.

Petrobras strategy for the next five years includes investing 6.5 billion US dollars in the construction of 1,215 kilometers of pipeline.

Brazil is attempting to cut its dependence on Bolivian imported gas through the 3,300-kilometer Brazilian-Bolivian gas pipeline built at the end of the 1990s.

Petrobras is facing strong pressure from Bolivia's new government for a significant natural gas price hike. Bolivia has been for several years Brazil's natural strategic partner in the gas business, and Petrobras has invested hundreds of millions of dollars in developing Bolivia's gas deposits and imports 30 million cubic meters per day.