Argentina, Brazil and Venezuela discuss South American gas pipeline

Experts from the three countries met in Caracas to discuss the $ 20 billion initiative. Gazprom is interested in the juicy contract.

Experts and ministers from Venezuela, Brazil and Argentina met Wednesday and Thursday in Caracas to discuss the construction of a 4,970 mile gas pipeline that would carry natural gas southwards from the Caribbean Sea across the Amazon jungle to Brazil and Argentina. The controversial project, which has an estimated cost of $ 20 billion and will be able carry to carry 150 million cubic meters of gas every day, has been harshly criticised by environmental groups and attracted the interest of many energy companies, including the Russian giant Gazprom.

The project will consist of piping gas from deposits in the southern portion of the Caribbean basin and from the Atlantic Ocean off the coast of Venezuela, to the Rio de la Plata (River Plate) estuary between Argentina and Uruguay. The route would be between 7,000 and 9,300 kilometres long, according to varying estimates, and the pipeline would link up with gas lines in Bolivia, Chile, Paraguay, Peru and Uruguay.

Eulogio del Pino, president of the high level coordinating group, said there has been progress on the project. "This is a decision of great significance for our peoples, and we are making progress," del Pino said. An official note issued at the beginning of the closed-door meeting recalled that Venezuelan President Hugo Chavez considers the gas pipeline a step "to a new level of Latin American and Caribbean integration."

Supporters say that the initiative promotes integration as part of the Venezuelan fuelled Bolivarian Alternative for the Americas, involving increased solidarity among the countries, complementing their resources, including social, and quite different from the US-promoted Free Trade Area of the Americas.

However, environmental organisations in Venezuela, Brazil and Argentina have issued their first warnings on the impact that the pipeline would have on the environment, and are calling for a public debate on the project. In Argentina the environmental issue is at the top of the agenda since neighbour Uruguay authorised European companies to install paper plants in its territory, which led to angry protests and a bilateral controversy of uncertain resolution.

The environmentalists described the pipeline project as "a plan arising from the most antiquated, primitive neo-liberal economic development policy," which offers fuel that is cleaner than oil "but poses greater operational risks, contributes to global warming just as oil does, will lead to deforestation all along the pipeline route, and is vulnerable to natural disasters or acts of sabotage."

In Bolivia, which is set to discuss new prices of gas with Argentina and Brazil, the announcement of the proposed mega-pipeline was described by ruling party lawmaker Gustavo Torrico as "a test balloon for the transnational corporations, just when we are moving towards the nationalisation of hydrocarbons."

Russia’s Gazprom, Spanish-Argentine Repsol and other multinational groups have contacted oil industry authorities in Venezuela and Brazil in recent weeks, expressing an interest in taking part in the construction of the pipeline, considered the most ambitious physical infrastructure initiative in South America. However, the low retail cost of natural gas for domestic users in the Southern Cone where market are regulated, make investors wonder about the rentability of the project.

Hernan Etchaleco

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Author`s name Dmitry Sudakov