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Brazil’s Cuts of Bolivian Gas Purchases by 60% Alarm La Paz

Brazilian Mines and Energy minister Edison Lobão announced that Brazil will temporarily shut down power plants fired by natural gas from Bolivia and will also reduce imports of the Bolivian fuel through the end of April.

The announcement was done when Brazil and Bolivia met to address the issue of the drop in demand. Bolivia was represented by Ministers Saul Avalos, Carlos Villegas and Hector Arce.

The meeting was requested by La Paz, which is concerned over Brazilian state-controlled energy giant Petrobras' January first decision to reduce its imports of natural gas from 31 million cubic meters per day in 2008 to some 19 million cubic meters per day at present.

Lobão told reporters that the drop in gas imports will allow Brazil to save close to US$ 600 million during the four-month period, adding that given the current global economic crisis, the country also is looking ahead to a possible reduction in the price of Bolivian natural gas.

Minister Lobão said the country's hydroelectric plants are generating more energy thanks to increased rainfall in recent months and for that reason Brazil no longer needs to keep operating all of its thermoelectric plants, which, because they use gas and diesel as fuel, are more costly and polluting.

In 2006, when Brazil relied on Bolivia for most of its natural gas, Bolivian President Evo Morales announced the nationalization of foreign natural gas assets, including those of Brazil's Petrobras.

Not only is Brazil the biggest consumer of land-locked Bolivia's gas, but Brazil's state-owned energy company, Petrobras, was the biggest investor in Bolivia's gas fields.

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