South American gas plan inches ahead

Hugo Chavez, the Venezuelan president, says Brazil, Argentina and his country will move forward on a proposed natural gas network spanning much of South America.

    (L-R) Chavez, Kirchner and Da Silva agree on the plan

    He added that the agreement heralded a new era of regional co-operation with less US influence.


    On Thursday, Chavez said: "This is the end of the Washington consensus," referring to a set of US-backed free market policies meant to solve South America's economic woes.


    "It is the beginning of the South American consensus."


    After a three-president summit in the Brazilian capital, Chavez, Argentina's Nestor Kirchner and Brazil's Luiz Inacio Lula da Silva confirmed plans to develop a proposed 8000km natural gas pipeline they hope will spread economic prosperity across vast swaths of South America.


    The three leaders - representing South America's three biggest economies - have committed their "political will" to carry out the project and will meet again 10 March in Mendoza, Argentina, Chavez said after the meeting. Kirchner and Da Silva did not talk to reporters.


    South American competition


    The pipeline would stretch from Caracas, Venezuela, to Buenos Aires, Argentina, cutting through Brazil's Amazon rain forest. It would also link to Bolivia, Paraguay, and Uruguay.


    Chavez downplayed concerns that the pipeline would create competition for Bolivian natural gas and called on Evo Morales, the country's president-elect, who takes office on Sunday, to sign on to the plan.


    Chavez said: "I have spoken with Evo and I can say there is nothing to fear. There will be gas for 200 years of development."


    The pipeline "is not to compete with but to complement" the economies of South America, he added.


    "Evo has said he will nationalise the gas industry. I hope he does it soon."


    Chavez also predicted the pipeline would be completed within seven years and dismissed doubts about the technical feasibility of the project, saying: "The Russians built a 4000km pipeline to supply gas to Europe."


    Asian investment


    The Venezuelan president predicted no difficulty in paying for the project, estimated at $20 billion.


    Chavez said several big Asian companies were willing to invest in the pipeline, including firms from China, although he did not identify them.


    All countries involved will help finance the project, and Venezuela's state-run oil conglomerate will pour in several billion dollars, Chavez said, adding: "There will be more financing than we might need."


    "This is the end of the Washington consensus... It is the beginning of the South American consensus"

    Hugo Chavez,
    Venezuelan president

    It was not clear how much each country would invest, but Chavez said the investments would pay for themselves if some countries - especially Brazil and Venezuela - change their petrol-powered cars to natural gas.


    According to Chavez, that shift alone would allow for a massive increase in petrol exports by both Venezuela and Brazil, generating as much as $15 billion in annual revenue.


    Argentina has the world's largest fleet of cars running on natural gas, followed by Brazil.


    Chavez said a first draft of the proposal will be announced by 9 March, including plans for centres of development along its path.



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