She emphasizes that the Gasbol pipeline has consolidated energy integration between Bolivia and Brazil and asserts that this bi-national pipeline now allows for regional integration by transporting gas from Vaca Muerta to the neighboring country.
ISSUE 135 | 2024
Vesna Marinkovic U.
1It has been said that integration in the region must start with bilateral relationships. In this context, can we talk about bilateral energy integration between Bolivia and Brazil?
Definitely, with the construction of the Bolivia-Brazil Gas Pipeline (Gasbol), bilateral energy integration between Bolivia and Brazil has been consolidated. With a length of 3,150 kilometers (557 in Bolivian territory and 2,593 kilometers in Brazilian territory), Gasbol has been the solid foundation upon which the energy business in Bolivia has been built, entering operations in 1999. This relationship has endured, and today, after 25 years, it continues to be strategic for Bolivia as an exporter and for Brazil as a consumer of natural gas. However, I believe that Brazil-Bolivia energy integration also has a regional character, with the possibility of gas from Vaca Muerta in northern Argentina reaching Brazil via the bi-national pipeline. In addition to its natural resources, Bolivia’s strategic geographic location in South America allows it to be an icon of energy integration. There are still other forms of energy integration, such as the Jirau hydroelectric plant, which will supply electricity to Bolivia; the connection of electrical networks in the border region; and the joint exploration of natural gas, as well as cooperation in biodiesel.
2So far, the basis for this energy integration process between both countries has been gas. What is the balance in this regard?
The balance is positive. Over the last 25 years, the purchase-sale contract between the state companies of both countries has generated a commercial flow that has provided a foundation for the growth of both countries, with significant revenues for Bolivia and a viable source of energy supply for Brazil. It is important to mention that 85% of Bolivia’s exports to Brazil (around USD 1.283 billion) consist of hydrocarbons.
3The relationship, at least commercially, between Bolivia and Brazil, based on natural gas, has led to significant pipeline infrastructure that will continue to serve Brazil’s gas purchases from Argentina. Consequently, have the benefits for Bolivia been reduced, or are they the same at this moment?
“…I believe it is very important for public and private institutions, as well as their leaders, to work in a coordinated and joint manner to integrate Bolivia with Brazil…”
We have learned from the media about ongoing negotiations for Argentine gas to reach the Brazilian market using Bolivia’s pipelines. This is an example of the benefits of a long-term trust-based relationship built on energy integration. In our view, Bolivia is maximizing benefits by utilizing existing and available infrastructure, providing Brazil and Argentina with a competitive option that can be implemented almost immediately for the purchase/sale of natural gas. As I have mentioned, Bolivia is an energy hub and also potentially serves as infrastructure for the integration of all South America.
4For precision, how much does Brazil pay Bolivia for the purchase of natural gas, and how much will it pay only for the transportation of gas from Argentina?
We understand that the transportation of gas from Argentina to Brazil is still an ongoing negotiation. We have not seen publications regarding conditions, prices, and volumes, so it would be premature to make a comparison. What we do want to emphasize is that when these agreements are finalized, they tend to be beneficial for all parties, as has been the case so far with the gas purchase/sale contract (GSA) between Bolivia and Brazil, which remains in effect. The advantage is that the transportation of Argentine gas to the Brazilian market can be done in addition to the export of our gas under that GSA. Traditionally, Brazil pays between USD 6 and USD 7 per million BTU (British Thermal Unit).
5If we talk about pipelines as existing infrastructure between Bolivia and Brazil, can it be said that they will continue to strengthen commercial exchange between the two countries?
Pipelines, similar to road infrastructure, are like the veins of a body that allow for commercial exchange between Bolivia and Brazil. In this sense, they will continue to encourage and facilitate trade between the two countries. Furthermore, there is still an incredible potential for commercial exchange between Brazil and Bolivia in industrial sectors, natural resources, and agriculture. With Bolivia’s entry into Mercosur as a full member, I believe these potentials will gradually be realized.
6The Binational Chamber of Commerce, along with other entities in Brazil, has just held an important business forum to analyze the levels of integration, infrastructure, and commercial relationships between Bolivia and Brazil. What is the most important evaluation regarding this?
The holding of this Forum has been very timely and relevant, considering Bolivia’s recent full membership in Mercosur, as well as the agreements reached during the visit of Brazilian President Luiz Inácio Lula da Silva last July. Both events have made it clear how important it is to strengthen the bilateral relationship through concrete integration projects between both countries, such as the Bioceanic Railway Corridor that will connect Bolivia, Peru, and Brazil; the Rondon Quadrant Route that will connect the three countries by land; and the mega bridge over the Mamoré River in Beni, which will link the cities of Guayaramerín on the Bolivian side and Guajará-Mirim on the Brazilian side.
The challenge is to promote these and other projects through working commissions involving responsible stakeholders in each country, as well as various institutions capable of articulating and communicating with governments and private counterparts.
Forums like the one we just held allow us to delve deeper into specific issues related to each of the ongoing projects and the integration topics that have been addressed, so they can be operationalized and not just remain in discourse or on paper.
On the other hand, I believe it is very important for public and private institutions, as well as their leaders, to work in a coordinated and joint manner to integrate Bolivia with Brazil, as combining efforts is the best way to achieve positive results, while a lack of coordination and a competitive attitude can be very detrimental.
As the Binational Chamber of Commerce, and given our proximity to the government, institutions, and the private sector in Brazil, we are determined to contribute to the articulation of all stakeholders involved in the current integration process, working with a proactive culture, as we have been able to appreciate in the Forum, the results of which are very encouraging for the prospects of economic and commercial complementarity between both countries.
…Bolivia is maximizing the benefits by utilizing an existing and available infrastructure, providing Brazil and Argentina with a competitive option.
