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SOUTH AMERICAN ENERGY MARKETS DAILY ROUNDUP (April 13, 2009): Bolivia agrees to supply Argentina with up to 6.5MMcm/d during the winter months

April 13, 2009

South America Energy Markets (SAEM) will begin a daily roundup of the top-five stories affecting energy markets in the region with links. The roundup includes all the major web dailies of South America and other websites that write about the region’s energy markets. I aim to publish SAEM Daily Roundup from Monday through Friday by noon London time.

Monday, April 13, 2009

ARGENTINA-BOLIVIA/GAS SUPPLIES

Federal Planning Minister Julio de Vido has agreed with YPFB President Carlos Villegas to supply Argentina with “up to 6.5 million cu m/day” during Southern Hemisphere winter, writes Buenos Aires daily La Nacion. Villegas has been quoted recently in the Bolivian media as saying that his country will supply Argentina during winter “a minimum of 4 million cu m/day.” Both officials also spoke about the future of the GNA gasline, which originally aimed to transport 27.7 million cu m/day to Argentina in the next decade. Construction of the pipeline project has been put on hold due to output uncertainty in Bolivia.

BOLIVIA/GAS OUTPUT

Due to falling demand in Brazil, gas output in Bolivia retreated in early 2009 by 23.8% to 32 from 42 million cu m/day (see South American Energy Markets Daily Roundup, April 7, 2009), writes La Paz daily La Prensa. Coupled with a sharp fall in gas prices, the Bolivian treasury sees revenues falling by 40% this year. Other analysts such as Alvaro Rios of GasEnergy, told SAEM that export revenues could fall by over 50% this year due to lower demand and energy prices.  The production of refined oil also fell from 47,017 from 50,756 barrels a day. Taking into account these worrisome figures, some analysts are convinced that Bolivia’s energy output problems will get much worse before they improve.

CHILE/LNG TERMINAL

Chile will inaugurate in July its first LNG terminal at Quintero, Energy Minister Marcelo Tokman was quoted as saying in El Mercurio de Valparaiso. The $1.1-billion plant will be South America’s fourth LNG regasification terminal after Bahia Blanca in Argentina, Pecem and Guanabara Bay in Brazil. The minister said that the 2.5 million tonnes/year plant will operate at full capacity by 2010.  He said that the LNG terminal will guarantee “100% gas supplies” to households and commercial establishments in the face of plummeted gas imports from Argentina. Due to falling reserves and declining output in Argentina, Chile’s eastern neighbor began to scale back supplies from 2004, when gas imports amounted for 24.3%  of total energy consumption. Chile used to import about 80% of its gas (about 22 million cu m/day) from Argentina. Gas restrictions from Argentina on April 7 stood at -20.29 million cu m/day (-88%), according to the latest information by Chilean energy regulator CNE.

Below is a short video clip in Spanish on the Quintero LNG regasification plant.


VENEZUELA/CRUDE EXPORTS

Searching for new markets and, most importantly, for foreign investment and future loan sources, President Hugo Chavez  signed two important energy cooperation agreements with China and recently with Japan (see South American Energy Marketes Daily Roundup, April 7, 2009), reports El Mundo of Madrid. “God blessed us with oil that China will need for the next 200 years from Venezuela,” said Chavez in the capital Beijing. “Previously the United States used to take our oil like a vampire.” Under the agreement with China, Venezuela will raise by 62% in 2013 its crude exports to the Asian country  from 389,000 barrels a day now.

URUGUAY/FUEL COSTS

Hydrocarbons poor Uruguay sees spending a total of $1.302 billion in crude-oil purchases and logistic costs, according to Montevideo daily El Pais.  State-owned energy company, Administracion Nacional de Combustible, Alcohol y Portland (Ancap), said itwill use such funds to acquire, oil, natural gas, oil derivatives as well as lubricants. The imported energy will also be earmarked for state-owned power company, Administracion Nacional de Usinas y Transmisiones Electricas’ (UTE) power installations.

These briefs can be reprinted as long as the source is cited.

If you have any feedback on today’s articles, or if there are energy industry stories you think should be covered, or need research assistance, please contact etessieri@latamreport.com.

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