Venezuela, Brazil, and Argentina Plan 8,000 Kilometer Gas Pipeline

Caracas, Venezuela, January 21, 2006—A new gas pipeline, which would run nearly the entire length of the South American continent, will be one of the largest infrastructure projects in Latin American history, if plans of Venezuela’s President Hugo Chavez, Argentina’s President Nestor Kirchner, and Brazil’s President Lula da Silva work out. The three presidents met last week, during their third trilateral meeting in Brasilia, where they discussed the plan, along with other topics related to Latin American integration.

According to Venezuela’s Minister of Energy and Petroleum, Rafael Ramirez, the pipeline will cost between $17 and $20 billion and will take up to seven years to build. The pipeline is supposed to reach from Caracas, Venezuela, to Buenos Aires, Argentina, via Brazil and with links to Bolivia, Paraguay, and Uruguay, stretching for a total of 8,000 kilometers.

Numerous energy experts expressed serious doubts as to whether the pipeline could be built. "It is very difficult to believe this will take place, because of the distance, the financing and the supply," said Sophie Aldebert, for example, from the Rio de Janeiro-based Cambridge Energy Research Associates to Bloomberg.com.

In Brasilia, Chavez said, "The pipeline is vital to us" and dismissed doubts that it could be built due to technical and financial difficulties. "The Russians built a 4,000-kilometer (2,500-mile) pipeline to supply gas to Europe," said Chavez, according to AP.

Other critics pointed out that the pipeline would foment competition between Venezuelan and Bolivia, as Bolivia already is Brazil’s largest gas supplier. Chavez, though, denied this would be case, saying that the pipeline will Bolivia and Venezuela to complement each other, rather than to compete against each other.

The cost of building the pipeline would be carried largely by outside investors, such as firms from Asia, according to Chavez. Venezuela’s state oil company, PDVSA would also provide "several billion" dollars.

Chavez also suggested that if Venezuela and other Latin American countries shifted their automobiles to gas power, this would make the pipeline even more affordable and would allow Venezuela to export far more gasoline. According to AP, Argentina already has the world’s largest fleet of gas-powered vehicles and Brazil the second largest.

The gas pipeline plan is part of the Chavez government’s proposal to build a Latin American energy "cone," which would integrate Latin America in a network of pipelines, electricity grids, and trade.

The Venezuela-Argentina gas pipeline plan will be unveiled at the next trilateral meeting of the three presidents, to be held in Argentina, on March 9th.