Venezuela and Brazil Agree To 1st Phase of Transcontiental Gas Pipeline

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Rio de Janeiro, Brazil, January 22, 2007—Venezuela’s and Brazil’s Presidents, Hugo Chávez and “Lula” da Silva signed a declaration to begin the first phase of the Great Southern Gas Pipeline late last week in Rio de Janeiro, Brazil. The Venezuelan president was in the neighboring South American country for the 31st Presidential MERCOSUR summit.

According to the Spanish news agency, EFE, the declaration is the first concrete document on the viability and future of the pipeline, which, if completed will be the largest such gas pipeline in the world. Construction could begin on the project by 2009, if the feasibility and engineering studies are positive.

The pipeline is planned to run 10,000 kilometers, from Venezuela to Argentina and have a capacity of 150 million cubic meters of gas per day. Construction of the pipeline is estimated to cost $23 billion.

The first phase of the pipeline will have a capacity of 50 million cubic meters of gas per day and will run 5,000 km from the gas fields of Mariscal Sucre in Güiria in Venezuela's Northeastern Sucre state to Porto de Sauipe, just outside of Recife, Brazil where Venezuela and Brazil have planes to build a joint refinery. According to the Brazilian market analyst firm, Ágora, just this first phase alone will demand 1,100 tons of piping. The second phase will connect this stretch to Argentina, Bolivia, Paraguay and Uruguay.

According to the President of the Brazilian state energy company, Petrobras, José Sérgio Gabrielli, the pipeline will also have bifurcations to all of Brazil's Northern capitals.

According to Gabrielli and Venezuelan Energy Minister Rafael Ramirez, Venezuela and Brazil are now set to begin conceptual engineering studies for the pipeline, which should be concluded by the end of this year. Venezuela and Brazil have designated $55 million to complete this first phase of conceptual engineering.

http://www.venezuelanalysis.com/news.php?newsno=2198


Venezuela's President Chavez and Brazil's President Lula exchange documents on the agreement to study the feasibility of the Great Gas Pipeline of the South. Credit: ABN