Venezuela's Chavez: Latam Gas Pipeline Idea Dead -Estado

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RIO DE JANEIRO -(Dow Jones)- The dream of building a natural gas pipeline
network to link fields in Venezuela to the consumers in Argentina, Brazil, Chile
and Uruguay is likely dead, Venezuelan President Hugo Chavez told reporters
Tuesday in Brazil.


Quoted by the local Estado news agency, Chavez said that talks with Brazil and
its state-run energy company, Petroleo Brasileiro (PBR), were now focused on
exports of liquified natural gas. Chavez made the comments during a visit to the
Amazon city of Manaus.


"Petrobras said that it preferred a different scheme, so now we're not talking
about the 'Pipeline of the South' but about a project to integrate the south,"
Chavez said.


Chavez had championed the idea of the gas pipeline for years as a solution to
the region's pressing energy needs - but it is an expensive and technologically
challenging idea.


The "Pipeline of the South" had been blasted by critics as too expensive, with
an estimated $23 billion price tag. In addition, there were substantial concerns
about the pipeline's environmental impact. An 8,000-kilometer tranche of the
pipeline would traverse pristine Amazon rain forest.


Among the ideas being discussed, Chavez said, was development of a natural gas
field in Venezuela that would export liquified natural gas to Brazil. The
natural gas would be processed at a regasification plant and enter into Brazil's
existing pipeline system.


Petrobras recently completed construction of a regasification terminal at
Pecem in Ceara state, which is expected to be operational in November. The plant
has an installed capacity to process 7 million cubic meters of natural gas a
day.


A second regasification terminal at Guanabara in Rio de Janeiro state is
expected to be completed in November or December. That terminal will be able to
process up to 20 million cubic meters of LNG a day.


In addition, Petrobras is also studying construction of a third LNG terminal.


Petrobras expects to boost imports of LNG rapidly in the coming years, rising
from 1.1 million cubic meters a day in 2007 to about 33.1 million cubic meters a
day in 2012.


-By Jeff Fick, Dow Jones Newswires; 55-21-2586-6085; jeff.fick@dowjones.com



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(END) Dow Jones Newswires
09-30-08 1503ET
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