Rio, 6/24/2003 (Agência Brasil - ABr) – The Brazilian Development Bank (BNDES) has announced that together with the Bank of Japan for International Cooperation it will finance natural gas pipeline expansion in the Northeast and Southeast regions of Brazil. The operation will involve US$1 billion.

As part of the country's Grid Project (Projeto Malhas), the undertaking will supply natural gas to residences, industries and thermoelectric power plants. It will also mean an increased participation of natural gas in the Brazilian energy grid, and the creation of some 10,000 jobs.

In order to make the project viable, two new companies were set up: Nova Transportadora do Nordeste S/A (NTN) and Nova Transportadora do Sudeste S/A (NTS), which are wholely owned by Japanese interests: Mitsui & Co. (40%), Itochu Corporation (30%) and Mitsubishi Corporation (30%), Petrobras will guarantee the supply of natural gas.

According to the BNDES, Brazil's natural gas pipeline system is very limited. There are 7,800 kilometers of pipeline in the country, compared to 12,500 kilometers in Argentina, and 450,000 kilometers in the United States. 75% of the pipelines Brazil has is concentrated in the states of São Paulo and Rio de Janeiro.

According to Petrobras, by expanding pipeline networks in the Northeast and Southeast, Brazil will be able to double its use of natural gas to 25 million cubic meters daily by the year 2010. Most of the additional gas would be used by thermoelectric power plants. (AB)