Brazilian gas firm cancels bidding for Bolivia-Brazil pipeline

A Brazilian gas company cancelled on Monday its bidding for contracts to expand a Bolivia-Brazil pipeline after Bolivia announced nationalization of its natural gas sector.

Jose Zonis, director of the Brazilian Gas Transport Company (TBG) which runs the Bolivia-Brazil gas pipeline, told an industry conference here that it had decided to cancel bidding for contracts to expand the system.

Zonis said he had sent documents to the country's National Petroleum Agency, and the decision was taken because the companies which use the pipeline had all waived their contracts with his company in response to Bolivia's nationalization plan, including Brazil's state-run oil company Petrobras, Spanish-Argentine energy company Repsol and France's Total.

Two other companies that also operate in Bolivia -- Pan Energy and British Gas -- had not cancelled, but had asked for a 180-day grace period while they analyzed the situation in Bolivia.

Bolivian President Evo Morales unveiled a plan to nationalize the country's natural gas sector on May 1, under which all foreign companies should sign new operating contracts or leave the country within 180 days.

Zonis said the company could restart the bidding process only if there were changes in Bolivia.

The TBG has paid off all construction costs of the pipeline, and it is projected to start making money next year.

Source: Xinhua