Bolivia, Argentina sign revised natural gas deal


Sucre (Bolivia) : The Bolivian and Argentine governments have made updates to a natural gas contract dating back to 2006, establishing guarantees for both sides and also for construction of a $98 million gas pipeline.

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The changes to the agreement were signed in this southern city by the presidents of the countries’s state-run energy companies – Carlos Villegas of Bolivia’s YPFB and Exequiel Espinosa of Argentina’s Enarsa – with Bolivian head of state Evo Morales and his Argentine counterpart Cristina Fernandez in attendance.

Also taking part in Friday’s ceremony at a sports coliseum in Sucre were Argentine Planning Minister Julio De Vido and Bolivian Energy Minister Luis Fernando Vincenti.

According to a report issued by YPFB, new clauses in the contract call for penalties to be assessed if the Bolivian company fails to supply the amount of gas specified in the contract or if Argentina’s purchases fall below a minimum level.

The revised contract also stipulates construction of a $98 million gas pipeline that will measure 15 km in length and 32 inches in diameter on Bolivia’s side of the border and 32 km in length and 30 inches in diameter on the Argentine side.

Bolivia will contribute $43 million and Argentina $55 million to the cost of the pipeline, which will expand transport capacity from 7.7 million cubic meters of natural gas per day to 13 million cubic meters per day.

Bolivia has been sending just 4-5 million cubic meters of natural gas per day to Argentina due to limited production, although it plans to boost output this year thanks to increased investment by foreign energy firms.

The president of YPFB, Carlos Villegas, has signed agreements with different energy firms – including Spain’s Repsol YPF – that call for further investment to boost natural gas output and allow more of the fuel to be shipped to Argentina.

With the revised contract, Bolivia is looking to ensure a steady market for its natural gas. The country’s biggest export market, Brazil, has become less reliant on Bolivian gas due to the bringing online of new gas fields and new liquefied natural gas terminals for imports.