March 8, 2017 / 5:28 PM / a year ago

CERAWEEK-Bolivia seeks new natgas buyers as Petrobras signals cutbacks

HOUSTON, March 8 (Reuters) - Bolivia is scrambling to find new buyers for its natural gas after Brazil’s state-run oil company signaled it plans to reduce imports from the neighboring country, Bolivia’s state-owned YPFB Chaco said on Wednesday.

An existing contract between YPFB Chaco and Petroleo Brasileiro SA, known as Petrobras, involves 30 million cubic meters per day of gas supply under a take-or-pay mechanism, turning Brazil into the main buyer of Bolivian gas. It expires in 2019.

But as Petrobras’ own gas production increases, it has notified YPFB that it will not renew the contract under the same terms, forcing the Bolivian firm to find new buyers in Brazil.

“The contract with Brazil worries us. We are currently negotiating with Petrobras the terms for a new contract or an addendum to the existent contract,” said Oscar Claros, general manager of YPFB Chaco on the sidelines of the CERAWeek energy conference in Houston.

Prices to Petrobras after 2019 have not yet been agreed, while “many potential buyers” also in Brazil are involved in the talks, Claros added.

“We could finally set different prices for many customers, which is good for us, but it will take time to have more than five contracts ready,” Claros said.

On the other hand, Argentina’s demand for imported gas keeps growing, but the contract that has allowed it to import Bolivian gas at a very competitive price compared with purchases of liquefied natural gas (LNG) will not expire until 2026.

In the long run, LNG facilities to export Bolivian gas look like the only solution to its dependence on a few regional customers, Claros said. “That is an alternative, but it is not yet mature.” (Reporting by Marianna Parraga; Editing by Marguerita Choy)

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