Bolivia's gas heads for Brazil as Argentina waits - and watches

The first 1,800 km stretch of a 3,400 km natural gas pipeline from Bolivia to Brazil will start operating in December. First planned 50 years ago, the pipeline has long been expected to result in an immediate surge of gas use in Brazil. However, impending deep recession in Brazil makes this prospect less likely despite the power shortages which indicate the need for considerable gas imports. Initially, most Bolivian gas will flow through Brazil to Argentina. But gas production is expanding rapidly in Argentina and the supply contract with Bolivia ends in 1999. Plans are well advanced to build two gas lines into the south of the Brazil from Argentina. Ultimately, it is anticipated that Argentina, which has abundant reserves and a virtually saturated domestic market, will become the principal source of natural gas for Brazil. (UK)