By Lucinda Elliott
MONTEVIDEO (Reuters) – Paraguay is advancing negotiations with energy companies and top government officials from Argentina and Brazil over a potential $1.5 billion gas pipeline to connect the three countries, officials said Reuters of senior government officials from Paraguay and Brazil.
The plan drawn up by Paraguay, reported in detail for the first time, aims to compete with a rival Bolivian bid to reuse existing pipelines to transport Argentine gas to Brazil. If either project comes to fruition, it would mark a potential major shift in regional energy flows.
“We want to sign a memorandum of understanding at the presidential level (for the pipeline) in June,” Mauricio Bejarano, Paraguay’s vice minister of mines and energy, told Reuters. “There is general support for the project.”
As Bolivia’s declining gas production forces Brazil to seek alternative suppliers, the potential option of gas from Argentina’s booming Vaca Muerta shale region via Paraguay’s Chaco is gaining ground, a said Rodrigo Maluff, Paraguayan Deputy Minister of Investment. This would involve an estimated investment of between $1.2 billion and $1.5 billion, partly from the private sector, he added.
The governments and companies of Argentina and Brazil have also been in negotiations with Bolivia since last year over what they believe to be the quickest and cheapest option to transport gas from Vaca Muerta to the north of the region, which would involve reversing the flow of the Bolivian gas pipeline. network.
In recent months, Paraguayan officials have courted investors in Sao Paulo and met with Brazil’s energy minister in Asuncion and Argentine officials. Tecpetrol, which controls about 15% of Argentina’s shale gas production, participated in these latest negotiations, as did Buenos Aires-based Pluspetrol, Maluff said.
The companies did not respond to a request for comment.
The Paraguayans said the pipeline’s initial daily capacity is estimated at 15 million cubic meters in the first stage.
Alexandre Silveira, Brazil’s minister of mines and energy, who visited Asuncion in April, told Reuters he was aware of Paraguay’s intention and had expressed support, but said further study was needed.
“We agreed to hold another meeting with the private sector to better study the viability,” Silveira said.
Plans shared with Reuters show the new pipeline would run 110 kilometers (68.35 miles) from Campos Duran in northern Argentina to the Paraguayan border, passing through an additional 530 kilometers of flat, arid land in the Paraguayan Chaco to reach Brazil.
An additional 400 km pipeline would connect Carmelo Peralta, on the Paraguayan-Brazilian border, to Matto Grosso do Sul and, from there, could join the existing Gasbol line to Sao Paulo, Brazil’s largest city.
The governments of Bolivia and Argentina did not respond to requests for comment.
Bolivia has for years been a key gas supplier to Brazil and Argentina, but its declining production and potential growth in the Vaca Muerta shale region are poised to change the energy flow…
