MercoPress. South Atlantic News Agency

Brazil considering new sources of natural gas

Brazil is considering buying natural gas from other countries including Nigeria after its main supplier, Bolivia, demanded higher prices.

Importing gas from Nigeria would require building new plants to process liquefied gas brought to Brazil in ships.

Brazilian state-owned Petroleo Brasileiro (Petrobras) would have to invest as much as $300m to supply Brazil's southern states alone with liquefied gas, said Sulgas president Edivilson Brom, whose company distributes gas throughout the state of Rio Grande do Sul.

"We have excellent relations with other gas-producing countries such as Nigeria," said Brazil's Foreign Affairs Minister Celso Amorim. "Our diplomacy has created the conditions for us to broaden our supplies."

Brazil is looking to diversify sources of natural gas after Bolivian President Evo Morales last week gave international oil companies in Bolivia six months to renegotiate contracts and pay higher prices for energy.

Brazil depends on Bolivia for half the natural gas it consumes.

Brazilian President Luiz Inacio Lula da Silva said in a speech in Aimores, Brazil, on Friday that his country must seek to become self-sufficient in natural gas in the same way it did in oil.

Natural gas distributors in the southern states of Brazil plan to press Petrobras to speed up plans to import liquefied natural gas to reduce their dependency on Bolivia, their only source of supply.

"We still can't rule out the possibility of future disruption in the supply from Bolivia due to (more) political change," said Brom. "We can't trust Evo Morales. He is very unpredictable."

Rio de Janeiro-based Petrobras will challenge any attempts by Bolivia to charge more for natural gas, and threatened to cancel all expansion plans in Bolivia, said CEO Jose Sergio Gabrielli on Thursday.

Lula da Silva has sought to allay tension with Bolivia, saying the two countries would negotiate energy prices "in the most democratic way possible".

After a three-hour meeting with Morales last week, Venezuela's President Hugo Chavez and Argentina's President Nestor Kirchner, Lula da Silva also backtracked on the decision to stop investing in Bolivia.

At least three other enterprises have said they would negotiate with Bolivia after the government said it would honour deals with the companies.