Pan American Energy, BG plc, and Uruguay's state petroleum company Ancap have signed a memorandum of understanding with Brazil's Rio Grande do Sul state government for construction of a $350 million, 920-km gas pipeline from Uruguay to the northern Brazil state.
The pipeline will supply up to 525 MMcfd of Argentine gas from the Argentina-Uruguay border to Brazil by 2000-01. The final volume will depend upon market demand. The pipeline, dubbed Gasoduto Cruz del Sur, will have a 500-km leg in Brazil's Rio Grande do Sul state and a 420 km-leg in Uruguay. Brazil's National Petroleum Agency recently authorized the project sponsors to import natural gas into Brazil from fields in Argentina's Neuquen and Austral basins. Within 6 months, the consortium intends to define markets and options for gas use along the pipeline, which will cross half the length of Rio Grande do Sul state, up to its capital of Porto Alegre. The pipeline will move the gas to the city gate owned by Sulgas, the state-owned local gas distribution company. Work on the Uruguayan segment is to begin in 30 days. Work on the Brazilian segment will start following approval by Brazil's Environment Ministry.
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