By an OGJ correspondent
RIO DE JANEIRO, Feb. 25--El Paso Corp.'s Brazilian subsidiary will sell its shares in the 3,150 km Bolivia-Brazil natural gas pipeline, according to Eduardo Karrer, president of El Paso do Brasil.
He added that the company would place its shares for sale as part of a strategy to "recycle investments" in Brazil. Karrer said that the, "pipeline does not bring aggregate value to our operations here."
The pipeline, which cost $2 billion to construct, currently transports an average of 24 million cu m/day of gas. The pipeline's full capacity is 30 million cu m /day.
Slow demand for natural gas in Brazil has blocked plans to boost the pipeline to full capacity as plans to build new gas-fired plants have been progressed as expected.
The government—led by Luiz Inacio Lula da Silva of the Workers Party (PT) that took office Jan.1—is giving priority to hydroelectric plants and placing the construction of new power lines up for bids, with the government as a minority shareholder.
Hydroelectric plants generate about 90% of Brazil's electricity. The construction of gas-fired plants was envisaged by the administration of former president Fernando Henrique Cardoso to avoid another electricity rationing like the one decreed during mid-2001.
Karrer said El Paso owns 9.67% of TBG, the Petroleo Brasileiro SA (Petrobras) subsidiary that owns the pipeline on the Brazilian side, and 2% of GTB, the company controlling the pipeline's Bolivian side.
El Paso is one of the few shareholders in the Bolivia-Brazil gas pipeline that doesn't own gas reserves in Bolivia.
Currently, El Paso Brasil will focus on natural gas and oil exploration, and is also more interested in producing cheaper gas locally to supply its five thermoelectric power plants, Karrer concluded.
