Bolivia awards gas plant contract to Argentine firm

La Paz, Agency
Bolivian state energy firm YPFB on Wednesday awarded Argentina's Astra Evangelista S.A. a $160 million contract to build a natural gas processing plant in the eastern province of Santa Cruz.

The president of Yacimientos Petroliferos Fiscales Bolivianos, Carlos Villegas, told a press conference that AESA submitted the lowest bid for the plant, which will allow Bolivia to separate the liquid components from the gas it exports to neighboring Brazil.

The goal is to industrialize those liquids in Bolivian territory.

AESA won the contract by beating out Argentina's BTU and Germany's SPG Steiner, which bid $187 million and $188 million, respectively.

In announcing the winning bidder, Villegas highlighted AESA's experience in building energy facilities in both Bolivia and Argentina.

The plant - due to come online in 2012 - will process a maximum daily volume of 5.6 million cubic meters (197 million cubic feet) of natural gas, producing 380 metric tons of liquefied petroleum gas and 600 barrels of gasoline per day.

The reference price for the project - determined via engineering studies - was $160 million, or virtually the same price offered by AESA.

The original plan called for the plant to be built in 2009 in Rio Grande, Santa Cruz, but the project was stalled after a corruption scandal that led to the dismissal and subsequent jailing of Villegas' predecessor, Santos Ramirez.

In July 2008, YPFB and the Argentine-Bolivian Catler Uniservice consortium signed an $86 million deal for the plant during a ceremony attended by President Evo Morales, who was a close friend of Ramirez's before the scandal broke.

However, Catler executive Jorge O'Connor D'Arlach was shot and killed by robbers while arriving at the home of Ramirez's relatives in late January 2009 with $450,000 in cash in his possession - part of a kickback for the contract.

YPFB management subsequently cancelled the contract in April 2009, three months after Villegas had replaced Ramirez, saying irregularities had been detected in the selection process.

Villegas on Wednesday defended the reference price for the gas processing plant, saying YPFB had found no technical justification for Ramirez's $86 million cost estimate for the project.