Bolivia to raise output as Brazilian imports drop

Bolivia's natural gas industry will attract $ 1.5 bn in investments this year to increase production and fuel supplies, according to development planning minister Carlos Villegas. Of the total investments, $ 500 mm pertains to private-sector efforts to increase production, the minister was quoted as saying.
State oil and gas company YPFB will invest $ 1 bn, in part to industrialize gas produced in Bolivia and to perform secondary well recovery, which is due to increase output in the country by 10,000 bpd. The company has not yet made public exactly how it will invest the $ 1 bn, which it will fund with its own resources, an YPFB official told.

In addition, YPFB in the second half of the year aims to open the Grande river gas complex in Santa Cruz department, which will increase LPG supply in the country.
"This is very important because it will give us enough LPG to supply the internal market," the minister said.

New export deal
Bolivia has not been able to increase gas production fast enough in recent years and so has not met supply commitments with Argentina. Despite that, Bolivia's government cried foul when Brazil said it was cutting back on imports in order to shut down some gas-fired generators.
High-level committees from Bolivia and Brazil met to resolve the issue. Brazil agreed to "normalize" natural gas imports, a report said.

Specifically, Brazil decided not to cut imports of 30 mm cmpd by 30 %, as originally planned. But the deal still reduces Brazil's imports from the more than 30 mm cmpd seen in 2008.
Under the new agreement, Bolivia will export 24 mm cmpd for sale in the Brazilian market and an additional 2.2 mm cmpd to the city of Cuiba under an interruptible contract. The Cuiba deal is due to close soon, the YPFB official said.

Apart from that, Bolivia will export 7 mm cmpd to Argentina, which has been receiving a little more than 2 mm cmpd in recent months. Bolivia also will supply 5.8 mm cmpd for its domestic market.
The deal is positive because it allows Bolivia to continue exporting the 31 mm cmpd it was supplying before the new deal, as Argentina is increasing imports, the YPFB official said. Negotiations could start back up in April-May if Brazil then decides it needs to increase natural gas imports.