September 12, 2008

Bolivia Crisis Cuts Natural Gas Supply to Brazil By Half

Bolivia crisis cuts natural gas supply to Brazil by half

RIO DE JANEIRO, September 11 (Xinhua) -- The political crisis in Bolivia led to a 55-percent reduction in the country's natural gas supply to its biggest customer Brazil, Transierra pipeline company said in a statement on Thursday,

The reduction was due to malfunction of a pipeline in southeastern Bolivia. It remains unclear if it was a technical problem or an act of sabotage.

It is the second incident with Bolivia's pipelines in less than 24 hours. A pipeline in the Yacuiba region exploded on Wednesday, leading to a 10-percent reduction in the natural gas exports to Brazil.

Brazil needs about 60 million cubic meters of natural gas every day, and half of the supplies comes from Bolivia.

Edison Lobao, Brazil's Minister of Mines and Energy, has met with technical personnel and experts from the country's state-owned oil and gas company Petrobras to work out a contingency plan to deal with the supply reduction.

Sao Paulo city, which depends on Bolivia for 60 percent of its natural gas supply, has already launched a contingency plan. Sao Paulo state's Basic Sanitation and Energy Secretary Dilma Pena said that the industrial sector will face the biggest reduction in gas supplies.

She added, however, that residential and commercial clients, as well as hospitals, will be spared from the supply reduction.

Protests, which broke out two weeks ago against Morales' plans to amend the constitution and reallocate gas revenues, turned violent this week in southeastern Bolivia. Anti-government protesters blocked the road, stormed official buildings and clashed with supporters of the president.

The borders to Brazil, Argentina and Paraguay have been closed and Bolivia's ambassador to Brazil, Rene Mauricio Dorfler, said his government is considering declaring a state of emergency in the country.

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