International Gas Trade-The Bolivia-Brazil Gas Pipeline
The Bolivia-Brazil natural gas pipeline, which will transport natural gas more than 3,000 kilometers, will cost US$2.1 billion to construct. Despite the substantial benefits for both Bolivia and Brazil and the involvement of reputable private partners, the perceived risks and complexities of this large project made financing it a major challenge. Peter Law and Nelson de Franco explain the historical factors that shaped the project, how the financing package came together, and the role the pipeline will play in liberalizing the Brazilian hydrocarbon sector
Many prospective international gas pipeline projects are under consideration-projects in Central and South Asia, and projects proposing pipelines from Russia to China and from Turkey to Eastern Europe. Given the large investments required, the main challenge is to design financing schemes that work. There are few blueprints to draw on. The World Bank can play a key transitional role in such projects. But there needs to be demonstrable commitment to opening the natural gas industry to competition and private investment and estab- lishing sound regulatory and pricing policies.
