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To Satisfy Its Appetite Brazil Goes Looking for Gas in Pipelines and Ships

Brazil’s oil and gas industry already represents 9% of the country’s GDP and should be reaching 10% some time next year, according to Haroldo Lima head of the Oil, Gas & Biofuels Nacional Agency.

Lima said that in the 70s the oil and gas industry represented 2.7% of GDP but following the 1973 oil shock Brazil invested massively in developing the industry and hydrocarbon reserves, which soared from 6.2 billion barrels in 1995 to 11.8 billion barrels in 2005.

Speaking in Rio do Janeiro next to Mines and Energy Minister, Silas Rondeau, Lima said the evolution of the industry in the last decade is proof of the merits of Law 9.478 of 1997 better known as the "oil bill".

In 1997 Brazil imported 47% of the oil and derivates it consumed and during the last twelve months oil dependency had plunged to 3%.

"This year Brazil reached oil self sufficiency but to keep it up it’s necessary to make new findings," said Lima.

Rondeau said that Brazil’s natural gas policy priorities are exploiting domestic resources and the building of a network of pipelines in South America linking producing and consumer countries.

The backbone of the network is the 10,000 kilometers gas pipeline from Venezuela to Argentina which should transport 150 million cubic meters per day with an estimated cost of US$ 23 billion.

The priority of such a project is under consideration by committees in five different countries, Argentina, Brazil, Venezuela, Chile and Bolivia, revealed Rondeau who added that "it figures in the short list agenda for Mercosur’s next summit in mid January".

"It’s a consortium, integrating the main gas pipelines as happened 40 years ago in Europe", said Rondeau.

Almost 50% of Brazil’s natural gas supply currently depends on Bolivia, a country with which Brazil’s Petrobras has an ongoing controversy over prices.

Mr. Rondeau said Brazil has plans for daily imports of 20 million cubic meters of liquid natural gas which are to be shipped to special terminals plus boosting domestic production from new deposits which should reach 24 million cubic meters pd by 2008.

"These options together, no matter where the gas comes from, be it by pipeline or by sea will be ensuring Brazil’s demand with its own gas production efforts," said Rondeau underlining that "we’re talking on a 30 year horizon based on proven reserves and depending on the price the final consumer will have to pay".

However Rondeau pointed out that the South American pipeline project "will only take off if prices are competitive. Nobody is going to embark on a non viable project."

Mercopress

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