MercoPress. South Atlantic News Agency

Presidential summit to set price

The presidents of Bolivia and Argentina will set a new price for the natural gas that Bolivia sends its neighbour on June 29 in Buenos Aires, Bolivian government officials said yesterday.

Officials had said previously that Bolivian President Evo Morales and his Argentine counterpart, Néstor Kirchner, would meet this week to discuss the deal. The announcement came late Monday after a meeting between Bolivian Vice President Alvaro García Linera and Argentine Planning Minister Julio De Vido that advanced year-old negotiations.

The two countries are attempting to reach a long-term contract that will increase the amount of natural gas Bolivia sends to Argentina while raising its price.

??We think both countries will benefit from this possible agreement that could be achieved in the coming weeks,'' said García Linera.

Morales said Sunday that Argentina had agreed to a 40 percent increase in the export price. Bolivia currently sells Argentina about six million cubic metres per day at roughly US$3.20 per million British thermal units. Bolivia has proposed raising the price to US$5.50, and the Argentines have countered with an offer of US$5.

The Bolivian government may send as much as 20 million cubic metres a day under a new 20-year contract, according to Andrés Soliz, Bolivia's hydrocarbons minister. Such an increase would require the countries to expand the capacity of a pipeline between the two countries.

García Linera said Bolivia was also requesting that the deal prohibit Argentina from reselling gas to regional rival Chile. ??We are putting in clauses that put limits on the use of our gas in Argentina,'' García Linera said.

The talks hit a snag earlier this month after Argentine officials acknowledged reselling some Bolivian gas to Chile.

Bolivia and Chile have not had diplomatic relations since 1978, and Bolivia has refused to sell gas to its energy-hungry neighbour until a territorial dispute dating from a 19th-century war is sorted out. Landlocked Bolivia lost its access to the Pacific in the war. Bolivia is also hoping to get negotiations moving again with Brazil, its largest natural-gas buyer. Brazil gets half of its gas from Bolivia, but talks on raising the price and possibly increasing the supply have stalled since Bolivia nationalized the industry on May 1.

The nationalization handed Bolivia's state energy firm majority control over all energy operations in the country and gave foreign companies six months to negotiate new contracts. Brazil's state-run energy company Petrobras, or Petróleos Brasileiros SA, is Bolivia's largest energy investor and has the most to lose from the nationalization. Brazil has said it is seeking to wean itself off Bolivian gas. Brazil's ambassador in Bolivia, AntÃÂÂ'nio Mena Gonçalves, said recently his country would accept a significant increase in the price it pays for gas but not as much as ??Bolivia is dreaming.''

Bolivia currently sells gas to Brazil at about US$3.80 per one million British Thermal Units