BOLIVIA-BRAZIL GAS LINE ROUTE DETAILED

May 11, 1992
State oil companies of Brazil and Bolivia have signed an agreement outlining the route for a 2,270 km pipeline system to deliver natural gas from Bolivian fields to Southeast Brazil. The two sides currently are negotiating details about construction costs as well as contract volumes and prices. Capacity is projected at 283-565 MMcfd.

State oil companies of Brazil and Bolivia have signed an agreement outlining the route for a 2,270 km pipeline system to deliver natural gas from Bolivian fields to Southeast Brazil.

The two sides currently are negotiating details about construction costs as well as contract volumes and prices. Capacity is projected at 283-565 MMcfd.

No official details are available, but Roberto Y. Hukai, a director of the Sao Paulo engineering company Jaako Poyry/Technoplan, estimates transportation cost of the Bolivian gas at 90/MMBTU and wellhead cost at $1.10/MMBTU. That would be competitive with the price of gas delivered to the Sao Paulo gas utility Comgas, he said.

Brazil's Petroleos Brasileiro SA estimates construction of the pipeline on the Brazilian side alone will cost $1.21.4 billion.

Bolivia's Yacimientos Petroliferos Fiscales Bolivianos (YPFB) is negotiating with private domestic and foreign investors for construction of the Bolivian portion of the project.

Italian contractor Snamprogetti estimates construction of the Bolivian portion will cost $294.4 million. Snam's estimate covers a 563 km, 20 in. line with initial capacity of 190 Mmcfd, inlet compression of 1,440 psi in Santa Cruz area gas fields, and compression of 660 psi at Porto Suarez terminal on the Brazilian border.

PROJECT DETAILS

Petrobras and YPFB chose a northern route for the Bolivia-Brazil gas system.

The line would extend from Santa Cruz de la Sierra to Porto Suarez in Bolivia, entering Brazil at Corumba and traversing the states of Mato Gross do Sul, Sao Paulo, Parana, Santa Catarina, and Rio Grande do Sul.

The two companies dropped a southern route that would have extended from southern Bolivia through Paraguay, entering Brazil at Foz do Iguacu and ending in Sao Paulo state. The alternate route would have meant a much smaller share of the Brazilian gas market.

The Santa Cruz-Sao Paulo system would encompass a total length of 1,900 miles, dividing into a new trunk line near Campinas south to Porto Alegre and a spur to an existing Rio de Janeiro-Sao Paulo line. Plans call for flow on the Rio de Janeiro-Sao Paulo line to be reversed and a 370 km line laid from Rio de Janeiro to Belo Horizonte.

Sao Paulo's industrial infrastructure currently receives about 35 MMcfd of gas from offshore Campos basin fields delivered via the Rio de Janeiro-Sao Paulo line. Once the new system is on line, Campos basin gas would move to markets in Rio de Janeiro and Minas Gerais states.

Petrobras, with a monopoly for transporting hydrocarbons in Brazil, plans to assume responsibility for transporting Bolivian gas to market. However, some legal officials contend Brazil's constitution would allow a joint venture with private domestic and foreign companies to lay the pipeline and transport the gas.

BENEFITS

Agreements related to the pipeline project also call for YPFB to award a risk contract to Petrobras international arm Braspetro for an exploration concession in Bolivia.

In addition, Petrobras may be allowed to build gasoline service stations in Bolivia.

Substitution of natural gas for fuel oil burned in Sao Paulo's industries is expected to improve Sao Paulo's air quality without resorting to costly advanced emissions control measures. Fuel oil presumably would then be diverted to a new generation of low emission, dual fueled, power plants representing about 2 million kw of new capacity.

The economic benefits of receiving Bolivian natural gas would be "phenomenal" for Sao Paulo state, Hukai said. The state accounts for about 45% of Brazil's gross domestic product.

Hukai also noted Bolivia's gas reserves are ample to supply Southeast Brazil's long term gas needs. He estimated Bolivian proved and probable natural gas reserves at 5.8 tcf.

Copyright 1992 Oil & Gas Journal. All Rights Reserved.