Bolivia vice-president assures Argentina to meet natural gas needs

July 16, 2007
Bolivia Vice-President Alvaro Garcia Linera has given assurances that his country will make every effort to meet Argentina’s rapidly increasing needs for natural gas.

Bolivia Vice-President Alvaro Garcia Linera has given assurances that his country will make every effort to meet Argentina’s rapidly increasing needs for natural gas. His statement came in an interview with Argentina’s Clarin newspaper following a meeting with Argentina’s President Néstor Kirchner.

Asked what the two men discussed, Linera said the main focus was on energy integration and strategic agreements between the two governments. “Right now,” he said, “Bolivia sells Argentina between 4.7-7.5 million cu m/day of gas, and we have signed a contract so that starting in 2009 or 2010 we will gradually be delivering another 20 million cu m/day of gas. This is not only a supply issue, but a matter of building infrastructure, like the gas pipeline for which Argentina conducted the bidding procedure last week.”

Asked if a concession could be withdrawn from a private company if it fails to meet its commitments, Linera said that the arrangement means that “Argentina will definitely have the gas that it has contracted for, no matter what.” He said, “We are confident about this, based on how things are going after the agreement on the investment plans of the foreign companies that are operating in Bolivia. But for us as a government, the Argentine market is a strategic market and we are going to guarantee its supplies above all.”

Linera noted that Kirchner was concerned about Argentina’s current energy crisis, saying that he has “many plans” regarding it. Last week, Kirchner used the word “crisis” to describe the severe shortages that have forced his government to ration gas for factories to guarantee enough energy to heat homes. “We have to cut [gas supplies] where it hurts least,” Alberto Fernández, cabinet chief, acknowledged last month-a reference to the government’s desire to avoid hitting domestic supplies four months before presidential elections.

Kirchner says the country’s dramatic economic growth has created bottlenecks, a point underlined by Linera, who told Clarin, “The energy crisis exists throughout the entire continent, and it is related to the economic boom, which is more modest than the boom in China, but [which] is still significant. Economic growth means more energy. And the sustainability of that growth requires a process of increased integration and solidarity.”

Last October Bolivia agreed to sell gas to Argentina that was worth more than $16 billion over the next 20 years, despite concerns that Bolivia’s unstable political climate would hinder the scale of investment necessary to extract and transport the gas.

At the time, Kirchner signed an agreement with Morales to increase gas imports fourfold in a drive to ease Argentina’s increasingly serious energy shortages. Argentina currently imports 7.7 million cu m/day, which, according to the agreement, will be increased to 27.7 million cu m/day by 2010.

Although Bolivia has the second-largest reserves of gas in South America, reports said a lack of infrastructure in the country means some $2-3 billion will have to be invested in exploration and development, while a further $1.2 billion will be needed to transport the gas, as existing pipelines are running at full capacity.