MercoPress. South Atlantic News Agency

Bolivia confirms pipeline to supply Paraguay and Uruguay with natural gas

Hydrocarbons minister Fernando Vincenti confirmed that Bolivia is interested in extending its natural gas pipeline network to add Paraguay and Uruguay to its list of clients now limited to Mercosur main associates, Brazil and Argentina.

“In Paraguay we had a meeting about the Urupabol (Uruguay, Paraguay, Bolivia) gas pipeline where we established a joint road-map to be further discussed at the end of the month; the idea is to open the Paraguayan and Uruguayan markets to the provision of Bolivian gas”, said Vincenti.

Bolivia has the second largest proven reserves of gas in South America behind Venezuela. However the Bolivian deposits were developed to provide a reliable source of energy to Brazil’s industrial hub Sao Paulo and Argentina.

As a consequence land locked Bolivia is also trapped by the two major Mercosur members that are not willing to let control of that abundant (and cheap) energy production.

Only with the advent of Bolivia’s first indigenous president Evo Morales, did Brazil and Argentina accept a renegotiation of gas prices.

“Taking advantage of our geographic situation we had fructiferous conversations with the ministers of Argentina, Uruguay and Paraguay. We are about to contract a consulting firm, with funds from the Andean Corporation, for three possible paths for the pipeline, and define the route for the duct from Bolivia to Paraguay’s capital Asunción and then to Montevideo, Uruguay” added the Bolivian minister.

Argentina must be involved in the talks because of geography: any pipeline to Mercosur smaller partners must cross its northern territory taking advantage of the main pipeline connected to the Argentine grid.

Vincenti said that once the project becomes effective Uruguay’s energy matrix would become 72% gas dependent, “this would be a win-win situation for Bolivia and Uruguay”.

The initial supply to Uruguay would be minimal, 300.000 cubic metres of gas per day.

However in the coming meeting in Buenos Aires “we should be ironing out more specific conditions for the agreement in the framework of regional integration, which means not only the sale of gas but finding ways for a more dynamic inter-action in energy issues which is of reciprocal benefit for all of us”, said Vincneti.