The Bolivia-Brazil pipeline project has been one of the most successful and high-profile projects of the last decade. The project involves the construction of over 3,000 kilometres of piping to transport natural gas from Bolivia to Brazil. It is a unique example of cross-border cooperation by some of the largest regional and international companies currently operating in Latin America. The Bolivian pipeline is operated by Gas Transboliviano SA (GTB), an Enron/Shell company.

On September 3 2001 the relevant TCQ, TCO and TCX transportation and payment agreements were signed in Santa Cruz. The signing of the agreements represents the settlement of three-year long negotiations between GTB, the state owned Petroleo Brasileiro SA (Petrobras) and Yacimientos Petroliferos Fiscales Bolivianos (YPFB).

The project is expected to generate $2.6 billion by March 2003. The transportation of 30 million cubic metres of gas per day is guaranteed. In addition, as a direct result of the project $500 million will be contributed to Bolivia's economic development. This will be invested in roads and the education, health and social work sectors. Sustainable development will also be possible.

With an increase from 4.7 trillion cubic feet prior to capitalization to 46 trillion cubic feet as of 2001, Bolivia has developed one of the largest gas fields in the Americas and now has South America's second largest gas reservoirs.

For further information on this topic please contact Ricardo Indacochea or Iver Von Borries at Indacochea & Asociados, Abogados by telephone (+591 3 535 356) or by fax (+591 3 581 200) or by email ([email protected] or [email protected]).