In an exclusive report obtained by Reuters, Paraguay is aggressively pursuing talks with energy firms and high-ranking government officials from Argentina and Brazil over a potential $1.5 billion gas pipeline project. Senior government officials from Paraguay and Brazil disclosed to Reuters the details of this ambitious initiative, which could potentially revolutionize the flow of energy in the region.
The proposed plan, unveiled for the first time, aims to establish a gas pipeline network connecting Paraguay, Argentina, and Brazil, directly competing with a rival Bolivian proposal. Mauricio Bejarano, Paraguay’s deputy mining and energy minister, revealed that discussions are underway to formalize a memorandum of understanding at a presidential level for the pipeline by June, with substantial backing for the project evident across the board.
As Bolivia’s gas production declines, Brazil is actively seeking alternative suppliers. Paraguay’s proposal gains significance as it explores the possibility of tapping into Argentina’s burgeoning Vaca Muerta shale region to meet Brazil’s energy demands. Rodrigo Maluff, Paraguay’s vice minister of investment, estimated the project’s investment to be between $1.2 billion to $1.5 billion, with a portion sourced from the private sector.
Government representatives and energy companies from Argentina and Brazil have engaged in negotiations with Bolivia since last year regarding the potential transportation of gas from Vaca Muerta to the northern region via a reversed flow in Bolivia’s pipeline network.
In recent months, Paraguayan officials have intensified efforts to attract investors, meeting with key stakeholders in Sao Paulo and holding discussions with Brazil’s energy minister and officials from Argentina. Tecpetrol and Pluspetrol, prominent players in Argentina’s shale gas sector, were among the participants in these talks.
According to plans shared with Reuters, the proposed pipeline would span 110 kilometers from Campos Duran in northern Argentina to the Paraguayan border, extending across 530 kilometers of the Paraguayan Chaco to reach Brazil. An additional 400 kilometers would connect Carmelo Peralta on the Paraguayan-Brazilian border to Matto Grosso do Sul, potentially linking to Brazil’s Gasbol line and facilitating supply to Sao Paulo.
While Bolivia and Argentina refrained from commenting on the matter, Alexandre Silveira, the Brazilian Mines and Energy Minister, expressed support for Paraguay’s initiative, emphasizing the need for further feasibility studies. Silveira highlighted that both proposals are not mutually exclusive and could complement each other, underscoring Brazil’s demand for Argentine gas to mitigate the impact of Bolivia’s declining production.
Victorio Oxilia, an energy expert and professor at the National University of Asuncion, emphasized Brazil’s pivotal role in shaping the project’s outcome, asserting that without Brazilian market demand, the project’s viability could be compromised.
The pursuit of the gas pipeline project underscores Paraguay’s determination to play a significant role in regional energy integration, potentially altering the energy landscape in South America.
