Bolivia plans natural gas pipeline to city of Trinidad

Dec 03, 2002 01:00 AM

Bolivia's government is planning to build a natural gas pipeline to the city of Trinidad, in Beni department, and may turn its back on the Caranavi-Trinidad power transmission line already under construction, a source close to the process told.
Bolivian construction firm Ingelec was awarded a concession to build and operate the 115 kV line in November 2001, and construction began in June this year.

To date Ingelec has invested $ 3.5 mm of the $ 25 mm-30 mm total cost to build 11.5 km of the line, according to Ingelec president Raul Quiroga. Total demand in the Beni region is around 6 MW, and the previous government decided to subsidize the project to the tune of $ 120 mm over 15 years.
"It seems the new government [which took office August 15] decided the subsidy was appalling, and believes there are more benefits from construction of a pipeline," the source told. The new government of President Gonzalo Sanchez de Lozada is proposing aggressive plans to boost Bolivia's domestic consumption of its enormous reserves, estimated at around 52 tcf.

Natural gas in Beni department could power a thermoelectric power plant close to consumers, feed into people's houses or provide fuel for vehicles, the source explained. The electric power regulator turned down a request from Ingelec for a construction license because it did not present an environmental impact study, according to Jose Salazar, wholesale markets director at the power regulator. The company can correct this problem and reapply for a license, he told.
However, Salazar agreed that the government appears to have changed direction on the project, adding that if a pipeline were built the transmission line would almost certainly not be economically viable. The regulator will be analysing the project and will probably issue a definitive ruling soon, he added.

Ingelec claims that all the necessary documentation, including the environmental study, had been presented to the proper authorities. "We believe there has been some mistake made by some of the authorities," Quiroga said.
Energy minister Marcelo Blanco was quoted as saying that because the license had not been issued, the shared-risk contract between Ingelec and state power company Ende was void. Quiroga said a report by local investment bank Argentaria-Caisa showed the transmission line was the best option, and would save the government $ 120 mm.

Bolivia's government is meanwhile moving ahead with construction of the pipeline. Just a few weeks ago, national VP Carlos Mesa issued a decree authorizing construction of the pipeline. Mesa was standing in for President Gonzalo Sanchez de Lozada, who was abroad.
The government is reportedly seeking financing for feasibility studies. The local Beni population approved the project after a meeting with energy policy vice minister Jhonny Nogales and hydrocarbons vice minister Mario Requena.

Source: Business News Americas
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