Eric Watkins
Senior Correspondent
LOS ANGELES, July 31 -- After earlier delays, Bolivia's state-owned Yacimientos Petroliferos Fiscales Bolivianos (YPFB) and recently nationalized gas transporter Transredes began construction of the 130 MMcfd Gasoducto Carrasco-Cochabamba (GCC) natural gas pipeline.
The $170 million GCC line will consist of 250 km of 16-in. pipe extending from the gas-producing region of Carrasco to the city of Cochabamba.
GCC is to help solve gas supply restrictions for the industry in Cochabamba, La Paz, Oruro, and Potosi arising from the insufficient capacity of the Gasoducto al Altiplano (GAA).
In May, it was reported the pending construction of GCC would be delayed by up to 90 days due to the nationalization of Transredes.
On June 2, the Bolivian government took over TR Holdings, the holding company that owned half of Transredes. TR Holdings was controlled by Royal Dutch Shell PLC (50%) and Ashmore Energy International (50%).
After the takeover, which gave YPFB 97.378% of Transredes, the Bolivian government said it would pay AEI and Shell $48/share for their interest in TR Holdings. The two firms reportedly are considering plans to sue the Bolivian government.
Meanwhile, to calm uncertainty over the fate of the company's projects, Transredes' incoming president and director Gary Daher Canedo said in June that the firm would still meet its investment and expansion commitments.
As part of YPFB, Canedo said Transredes would "prioritize" the GCC construction project as well as the extensions of the existing GAA and Gasoducto Villamontes-Tarija (GTV).
In May, before it was nationalized, Transredes had already completed phase two works on the GVT, raising its capacity to 13.8 MMcfd at a cost of $23.5 million.
Last November, Bolivia's President Evo Morales inaugurated the phase three expansion works of the GAA, which will connect to the GCC, increasing its transport capacity to 32 MMcfd from 27 MMcfd.
Bolivia has the second-largest proven natural gas reserves in South America behind Venezuela at 24 tcf in 2007. The Tarija department contains more than 85% of Bolivia's total reserves, followed by Santa Cruz department with 10.6% and Cochabamba with 2.5%.
Contact Eric Watkins at [email protected].
