Brazil’s Petrobras frets over Bolivia gas supply

23 February 2008 00:13  [Source: ICIS news]

HOUSTON (ICIS news)--Brazil’s state-run Petrobras cannot spare any Bolivian natural gas to fill a potential supply shortfall in Argentina this year, company President Jose Sergio Gabrielli said on Friday.

The comments came amid talks by heads of state and other officials about the region’s near-term energy scenario and a scarcity of gas to meet demand.

Natural gas is used as petrochemical feedstock in Argentina and Brazil, although Brazil uses predominately liquid feeds.

Gabrielli said it would be “impossible” to give up any of its natural gas imports from Bolivia due to current levels of demand.

Petrobras purchases gas from Bolivia to supply Brazilian thermal power plants, which are currently running at full capacity. The thermal plants are needed to offset low hydroelectric reservoir levels around much of the country.

Argentina is also facing an electricity shortage and to attenuate the problem, Bolivian officials had floated the idea that Brazil could allow Bolivia to diminish its contracted deliveries in order to help Argentina.

Argentina faces an estimated shortfall of some 2m-3m m³/day from its requested total take of 8m m³/day, whereas Brazil is fully utilising its imports from Bolivia of about 31m m³/day, industry sources said.

“Petrobras is disposed toward, together with Brazil, studying some possibilities for the supply of electricity to Argentina in case of an emergency,” Gabrielli was quoted by state news agency Agencia Brasil in Portuguese.

Gabrielli was in Argentina at the same time as Brazil's President Luiz Inacio Lula da Silva, but was not speaking on behalf of the government.

Brazilian Foreign Minister Celso Amorim also avoided making any commitments to Argentina about the provision of gas.

Amorim, who heads the delegation for talks with Argentina about the resolution of energy shortages reiterated that Brazil will help Argentina in this crisis as long as it does not harm Brazilian supply.

Bolivian President Evo Morales will join the talks on Saturday and the conversations will focus on natural gas.

(Additional reporting by George Martin)

By: John Waggoner
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