TotalFinaElf signs agreement to acquire interest in Bolivia-Brazil gas pipeline

abarrelfullabarrelfull wrote on 09 May 2012 11:27

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June 22, 2000

TotalFinaElf has signed an agreement with the Australian company Broken Hill Proprietary Company Ltd (BHP) to acquire its 33.3% interest in BBPP Holdings Ltda., which holds a 29% interest in the Brazilian company Transportadora Brasileira Gasoduto Bolivia- Brasil S.A., owner and operator of the Brazilian section of the Brazil-Bolivia gas pipeline. TotalFinaElf will therefore hold a 9.7% interest in this pipeline. Finalization of the transaction is expected before end of June 2000.

The 3,000-kilometer gas pipeline covers a distance of 500 kilometers in Bolivia and 2,500 kilometers in Brazil. It supplies markets experiencing intensive development in south and southwest Brazil, starting from the Bolivian gas reserves where the Group has made important discoveries during the past two years.

The Bolivia-Brazil gas pipeline was built in two stages. The first section, linking Santa Cruz in Bolivia to São Paulo, began service in July 1999. The second section, from São Paulo to Porto Alegre was completed last month. Overall cost was $2 billion; $1.6 billion accounting for the Brazilian section. This represents one of the largest infrastructure projects carried out in Latin America, allowing for the development of the natural gas market in Brazil. Forward-looking analyses show that the share of natural gas in total energy consumption in Brazil should pass from 2% to more than 10% by the end of the decade.

The transmission capacity of the pipeline, which is already entirely contracted, should rapidly attain 30 million cubic meters of gas per day and could be increased to a higher capacity.
This transaction follows an agreement with the Canadian company Transcanada Pipeline announced on May 31, to acquire its gas transmission assets in Argentina, Chili and Southern Brazil. The new agreement marks an important step in TotalFinaElf’s strategy to develop its downstream gas activities in the gas chain in a region where it holds large gas reserves and is already an important producer.

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