Paraguay Proposes Counteroffer for $1.5B Argentina-Brazil Gas Link

Paraguay Proposes Counteroffer for $1.5B Argentina-Brazil Gas Link

May 9, 2024 : Paraguay has emerged as a potential challenger in constructing a gas pipeline connecting Argentina and Brazil. The South American nation has submitted a competing proposal for a $1.5 billion project, vying for a role in this significant regional energy infrastructure initiative.

This development comes amidst ongoing discussions between Argentina, Brazil, and Bolivia regarding the potential repurposing of existing Bolivian pipelines to transport Argentine shale gas to Brazil. Negotiations between these three countries have been ongoing since 2023, focusing on reversing the gas flow through Bolivia’s pipeline network.

However, Paraguay is now proposing an alternative route. Their plan involves constructing a new pipeline directly connecting Argentina’s Vaca Muerta shale gas reserves – a prolific and rapidly growing source – to Brazil, traversing Paraguayan territory in the Chaco region.

Paraguayan officials are actively courting potential investors and have held discussions with energy firms and high-ranking government representatives from both Argentina and Brazil. The proposed pipeline boasts an initial capacity of 15 million cubic meters of gas daily.

Several factors are believed to drive Paraguay’s push for inclusion in the project. Bolivia’s declining natural gas production has prompted Brazil to seek alternative gas suppliers. Paraguay views its proposal as a solution, offering Brazil access to Argentina’s abundant shale gas reserves.

Furthermore, Paraguay hopes to leverage this project to bolster its own economic development. The construction and operation of the pipeline could generate significant revenue and create employment opportunities within the country.

The feasibility of Paraguay’s proposal remains under evaluation. While Brazil’s Mines and Energy Minister has expressed general support for the project, further studies are needed to assess its economic viability and technical considerations compared to the Bolivian-led option.

A decision on the chosen route for the Argentina-Brazil gas connector will likely be made in the coming months. Paraguay’s proposal presents a new dimension to this critical energy infrastructure project, potentially altering the regional energy landscape in South America.


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