MercoPress. South Atlantic News Agency

Bolivia highlights gas pumping deal as a source of hard currency

“We are estimating more than 10 million dollars per month,” Montenegro said

Bolivia will be collecting some US$ 120 million yearly for allowing Argentine gas from Vaca Muerta through to Brazil, Economy Minister Marcelo Montenegro explained Wednesday during a press conference in which he highlighted the importance of Tuesday's agreement to bringing fresh foreign currency into the country's coffers in addition to its strategic nature in a regional context riddled with energy challenges.

“We are estimating more than 10 million dollars per month. Then, we would have to think that Argentina will send an important nomination. This flow will be progressive, but the benefits are evident for Bolivia,” Montenegro stressed about the understanding between the state-owned Yacimientos Petrolíferos Fiscales Bolivianos (YPFB), Total Energies of Argentina and Grupo Matrix Energía of Brazil allowing for the use of some 1,000 kilometers of Bolivian gas pipelines. Montenegro also underlined that this deal placed Bolivia as a key player in the energy integration of the Southern Cone.

According to YPFB, the base cost for transporting the gas will be US$2 per million BTU (British Thermal Unit), subject to the contracted volume, which may be daily, monthly, quarterly, or annually.

YPFB President Armin Dorgathen said Tuesday that the agreement represented a “crucial step” to ”promote the efficient flow of gas between Argentina and Brazil, taking advantage of existing infrastructure and strengthening regional cooperation.”

Argentina reached a deal to sell Vaca Muerta gas to Brazil on the sidelines of the G20 Summit. Pumping is due to start next year and by 2030 both parties hope to reach a volume of 30 million cubic meters per day, the same quantity that Brazil used to buy from Bolivia.