Bolivia, Argentina near natgas exports agreement

By Eduardo Garcia

LA PAZ, Feb 22 (Reuters) – Bolivia and Argentina are likely to sign by March a contract amendment that will extend the deadline for the Andean country to boost natural gas exports to its wealthier neighbor, Bolivian Vice President Alvaro Garcia Linera said on Monday.

Bolivia agreed in late 2006 to nearly quadruple exports of natural gas to Argentina from the current maximum of 7.7 million cubic meters a day but, according to local media and analysts, the two countries have been negotiating an amendment to the deal for some months.

“Our goal is to sign (the amendment) before the end of March with the presence of both presidents. There is agreement on the central points, but the technical details are still pending,” Garcia Linera told a press conference in the southern city of Tarija after meeting with Argentine Planning Minister Julio de Vido.

Garcia Linera said the new deal calls for a gradual increase of Bolivian natural gas exports to Argentina to 16 million cubic meters in 2013 and to a maximum of 27 million cubic meters a day by 2017.

The initial agreement called for Bolivia to send up to 27.7 million cubic meters to Argentina by 2014.

Bolivia plans to boost exports to Argentina mainly by tapping its Margarita field, which is run by Spain’s Repsol (REP.MC), Garcia Linera said.

For that, the two countries need to build a cross-border pipeline of roughly 50 miles (80 km), de Vido told reporters.

FOREIGN FIRMS KEEN TO INVEST

Foreign energy firms in Bolivia, including Repsol, Brazil’s Petrobras (PETR4.SA) (PBR.N) and France’s Total (TOTF.PA), froze investments in the country after leftist President Evo Morales nationalized the natural gas industry in 2006.

But late in 2009, a consortium led by Repsol unveiled plans to invest $1.5 billion to boost natural gas output, and earlier this month Total launched a natural gas exploration project, saying it is considering to invest some $500 million in Bolivia.

State-run energy company YPFB sees Bolivia almost doubling natural gas output to 76 million cubic meters a day by 2015 and the Bolivian government has repeatedly said foreign companies plan to increase production in the country.

Still, Bolivia’s natural gas production has been steady at around 40 million cubic meters a day since 2006 and analysts say demand for it is dwindling.

Brazil significantly reduced its imports in 2009 due to an economic downturn and heavy rains that allowed the country to produce more hydroelectric power.

Bolivia only exported around 2.5 million cubic meters a day to Argentina in January, according to analysts.

Bolivia can only boost production if Argentina and Brazil — the only buyers of its natural gas — start demanding more fuel, or if Bolivia finds new markets. (Editing by Marguerita Choy)

Source: Reuters

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