Bolivia says Braskem wants to build $1.4 bln plant
Wed Feb 21, 2007 2:49pm ET

LA PAZ, Feb 21 (Reuters) - Brazilian petrochemical company Braskem aims to build a $1.4 billion plant in Bolivia, near the border with Brazil, Bolivian Energy Minister Carlos Villegas said on Wednesday.

"There is a concrete proposal from the company Braskem. The largest petrochemical company in Brazil has presented a project ... it's an investment worth $1.4 billion, and it has the backing of Petrobras and the Brazilian government," Villegas told local radio Illimani.

Brazilian state energy company Petrobras is the largest energy investor in Bolivia, which has the second-largest natural gas reserves in South America after Venezuela.

Petrobras has been weighing whether to team up with Braskem -- Latin America's largest petrochemical company -- on this project. The plant would use natural gas to make polyethylene.

Villegas said that Braskem representatives will visit Bolivia in early March to explain the project's financial and technical details to officials from Bolivian state energy company YPFB, which would also participate in the venture.

Last week, Bolivia and Brazil partially resolved a long-standing dispute over the price Brazil pays for Bolivian natural gas.

Under a deal signed by Bolivian President Evo Morales and Brazil's Luiz Inacio Lula da Silva, Brazil agreed to pay some $100 million a year for the natural gas by-products it imports from its impoverished neighbor.

Under the previous agreement Brazil paid a fixed price for natural gas in bulk, but nothing for the derivatives it extracted from the Bolivian fuel. Negotiations continue over the price Brazil pays for Bolivian natural gas, which Morales is pushing to increase by as much as 25 percent.

Energy-hungry Brazil is Bolivia's top natural gas buyer, importing some 26 million cubic meters a day from an agreed maximum of 30 million cubic meters.

Leftist Morales nationalized his country's energy sector last year, forcing companies with investments in the country to sign new operating contracts granting a larger share of profits and greater control to the Bolivian state.

Source: Reuters

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