Peter Howard Wertheim
OGJ Correspondent
RIO DE JANEIRO, Feb. 20 -- After months of negotiations, Bolivian President Evo Morales and his Brazilian counterpart Luiz Inácio Lula da Silva have signed a protocol agreement that formalizes an increased price for natural gas that Bolivia exports to Brazil.
Brazil agreed to pay $4.20/MMbtu for Bolivian gas. This is an increase from the previous $1.09/MMbtu rate. The agreement refers specifically to gas used by a thermoelectric power plant in Cuiaba, in western Brazil, where 1 million cu m/day of gas is delivered via a 267-km pipeline in which Royal Dutch Shell PLC holds a 38% stake (OGJ Online, Jan. 30, 2007).
Carlos Villegas, Bolivia's hydrocarbons minister, described the agreements as very encouraging in terms of bilateral relations between the two countries. The agreements point to a mutual commitment to enter a new phase of energy cooperation, he said.
No agreement, however, has been reached concerning Brazil's imports of 26 million cu m/day—about half of Brazil's daily gas consumption—through the 3,150-km Bolivia-Brazil gas pipeline. Brazil pays slightly higher than $4/MMbtu on average for this gas. Bolivia wants Brazil to pay about $5/MMbtu for the gas, after reaching a similar agreement with Argentina.
