Paraguay Pushes $1.5 Billion Rival Gas Pipeline Plan to Connect Argentina and Brazil

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Paraguay Pushes $1.5 Billion Rival Gas Pipeline Plan to Connect Argentina and Brazil

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Paraguay on the map (© Shutterstock/hyotographics)
Paraguay on the map (© Shutterstock/hyotographics)

Paraguay is in advanced talks with energy firms and government officials from Argentina and Brazil over a potential $1.5 billion gas pipeline project, aiming to create a new route for gas flow in the region.

This plan would compete with a separate Bolivian proposal to repurpose existing pipelines for the same purpose if realized.

"We are aiming to sign a memorandum of understanding at a presidential level for the pipeline in June," said Mauricio Bejarano, Paraguay's deputy mining and energy minister, adding that "there is general support for the project."

The motivation behind the project stems from Brazil's need for new gas suppliers due to declining production in Bolivia. 

Paraguay's proposal involves transporting gas from Argentina's booming Vaca Muerta shale region through the Paraguayan Chaco, with initial estimates suggesting an investment of $1.2 to $1.5 billion, with partial funding from the private sector.

Paraguay has been actively courting investors and government officials. Recent meetings included Brazilian Energy Minister Alexandre Silveira, who supported further studies on the viability of the project.

The proposed pipeline would stretch over 1,000 kilometers (621 miles), beginning in Argentina's northern region of Campos Duran, running through Paraguay's Chaco, and reaching Brazil's Mato Grosso do Sul state, potentially connecting to the existing Gasbol line that supplies Sao Paulo.

While Bolivia, the traditional gas supplier to both Brazil and Argentina, has not commented on the project, Brazil has made clear its interest in Vaca Muerta shale gas to meet its energy needs.

"Brazil is the key market," said energy expert Victorio Oxilia of the National University of Asuncion, adding, "Without Brazilian demand, the project wouldn't move forward."

Brazil's Energy Minister Silveira noted that the Bolivian and Paraguayan proposals could coexist, offering an additional supply route for specific Brazilian regions. 

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