Brazil Asked to Pay More than Double (US$ 8) for Bolivian Gas

Bolivia is asking Brazil to pay US$ 8 for the natural gas it pumps at a rate of 27 million cubic meters per day, according to a report  from the Bolivian Information Agency.

President Evo Morales was scheduled to meet his Brazilian counterpart Lula da Silva during the Mercosur gathering in Caracas when Venezuela officially began the process of full membership of the South American customs union. Mercosur full members are Argentina, Brazil, Paraguay and Uruguay.

Brazil currently pays US$ 3.40 for every thousand BTU (British Thermal Units), and this is the first time that Bolivia officially floats the new price it will be demanding since the country took over all hydrocarbons resources and industry assets last May 1st.

Bolivia’s Energy Minister Solí­z said that the US$ 8 price includes a 50 US cents "environmental fee".

"We’re asking from Brazil US$ 7.50 as the basis for negotiation because the prices basket in Sao Paulo indicates that’s the value of Bolivian natural gas, so we’re asking from Brazil market price," said Solí­z.

However this is higher than the price agreed last week with Argentina, five US dollars for every 1.000 BTUs, and which was stamped by presidents Morales and Nestor Kirchner in a meeting in Buenos Aires.

Actually Bolivian natural gas price negotiations began three months ago but were frozen following the nationalization of hydrocarbons resources and a pending Brazilian debt from an export contract dating back to 1999.

Under the "take or pay" clause, between 2000 and 2005, Brazil did not consume the energy volume agreed and therefore according to Bolivia has an accumulated debt of US$ 450 million.

Bolivia has been insisting on an update for natural gas prices since Morales became president last January. Morales has a backlog of social advancement programs to deliver, which he expects to finance with the additional income from the country’s sale of natural gas to Argentina and Brazil.

Bolivia sells Argentina 7.7 million cubic meters per day and of next July 15 will be paying US$ 5 per thousand BTU. However at the end of the year a new contract and conditions has to be agreed.

Mercopress – www.mercopress.com

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