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Brazil to Invest US$ 18 Bi in Gas and More than Double Production

Gas production in Brazil

Gas production in Brazil Brazil's state-controlled oil company Petrobras is planning to invest US$ 18 billion in the gas sector over the next four years. Most of the investment should take place in 2008. With this, the gas production that totaled 27.5 million cubic meters last year should reach 70 million cubic meters by 2011.

This announcement was made yesterday by Petrobras president José Sérgio Gabrielli, during the seminar Natural Gas: Regulator and Investment Attraction, promoted by the National Confederation of Industries (CNI), in Brazilian capital Brasí­lia.

"We will expand the grid of gas pipelines to 8,500 kilometers by 2010," stated Gabrielli, adding that the investment is part of the Plan for Anticipation of Gas Production (Plangás), being developed in partnership with the federal government to expand production of natural gas in Brazil.

The president pointed out, however, that the Brazilian autonomy depends on heavy investment. "The gas industry requires great investment. It is not possible to consider the production chain without great investment and long-term return," he said.

Brazilian oil company Petrobras and Algerian state-owned Sonatrach, signed at the end of May a memorandum of understanding. The document forecasts the study, among other projects, of cooperation for the Brazilian import of liquefied natural gas (LNG).

Sonatrach is the largest oil company on the African continent and the 12th largest in the world, according to Petroleum Intelligence Weekly (PIW). Algerian gas, according to the Petrobras statement, would be used in terminals that the company is implementing in Pecém Port, in the northeastern Brazilian state of Ceará, and in Guanabara Bay, in the southeastern Rio de Janeiro.

The agreement, signed in Algeria, also forecasts studies in the area of exploration and production on onshore, and especially offshore, blocks in Brazil, Algeria and in some countries of common interest. Petrobras and Sonatrach also established a Master Agreement contract for the GNL supply, with general clauses that establish the guidelines for both countries for a possible future sale and purchase of LNG.

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