Cuiabá Pipeline

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Cuiabá Pipeline, known in Brazil as the Gasoduto Bolivia-Mato Grosso or Lateral Cuiabá, is a gas pipeline running from Santa Cruz, Bolivia to Cuiabá, Brazil.

Location

The pipeline runs from San José de Chiquitos, Bolivia to Cuiabá, Brazil. Starting at a junction with the Gasbol gas pipeline at the Estación Chiquitos compression station, the pipeline runs northeast to San Matias, Bolivia, where it crosses the border and continues northeast through the Brazilian municipalities of Cáceres, Poconé, Nossa Senhora do Livramento and Várzea Grande to reach Cuiabá.

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Project Details

• Operator: GOM (GasOcidente do Mato Grosso Ltda)
• Owner: Âmbar Energia
• Parent company: Grupo J&F
• Capacity: 1.02 bcm/y (2.8 MMm³/d)
• Length: 645 km / 401 miles
• Diameter: 18 inches
• Status: Operating
• Start Year: 2002
• Associated infrastructure:
  • Gasbol gas pipeline
  • Cuiabá power station

Background

The Cuiabá pipeline, operated by GOM (GasOcidente do Mato Grosso Ltda, a subsidiary of Grupo J&F), is a natural gas duct going from near the city of Santa Cruz in eastern Bolivia to Cuiabá, Mato Grosso, in Brazil. In Cuiabá it fuels the Cuiabá power station, originally owned by Enron and currently owned by Âmbar Energia (another subsidiary of Grupo J&F). The gas pipeline is 645 km long, with 283 km on the Brazilian side and 362 km on the Bolivian side. Construction of the pipeline began in 1999 and was completed in 2001, with commercial operations starting in 2002.

In early 2018, GOM suspended transport of gas through the pipeline, citing insufficient gas supply from Bolivia and contract disputes with Petrobras, which had been providing gas from its own supply under a separate arrangement. In April 2018, Âmbar Energia announced that it would shut down its Mario Covas power plant indefinitely, noting that it had only received enough gas to run the plant for 35 days over the past nine months. GOM subsequently filed papers with Brazil's national petroleum agency ANP stating that the pipeline was no longer financially viable.

Natural gas transported through the pipeline is important to several other companies in the Cuiabá region, most notably MT-Gás, which supplies compressed natural gas to service stations throughout Mato Grosso for vehicular use. In April 2018 Mato Grosso's state government filed a motion in court to force GOM to continue supplying gas through the pipeline.

In July 2019 GOM signed a new contract allowing for resumption of Bolivian natural gas imports, and by August 2019 the pipeline was again supplying gas to the Cuiabá power station, allowing the plant to generate at its peak capacity of 480 MW.

In September 2019 it was announced that the pipeline would again begin supplying gas to MT-Gás and other smaller users. Under the new agreement, the pipeline was expected to supply roughly 5 million cubic meters per month to customers in the industrial, agricultural and transport sectors.

As of March 2021 Âmbar Energia was reportedly negotiating with the state-owned Bolivian gas company YPFB to establish terms of a new gas supply contract for its Cuiabá power station.

In July 2022, Âmbar Energia announced that it was building four new power plants in Cuiabá with a total capacity of 326 MW, all to be supplied with Bolivian gas via the Cuiabá pipeline.

Environmental and Human Rights Impact

The project runs through the 15 million-acre Chiquitano Forest, which is the world's last significant remnant of intact dry tropical forest, and one of the world's richest wildlife habitats. It is situated in a biogeographical transition zone between the humid evergreen Amazonian forests and the arid thorn scrub of the Gran Chaco to the south, and the seasonally flooded savannas of the Rio Beni and the upland Cerrado savannas and Pantanal wetlands - the world's largest wetlands region. Although the number of communities is unclear from the sources, there have been between 170 and 270 indigenous and peasant Chiquitano and Ayoreo communities living in the Chiquitano forest - an estimated 57,000 people. There has also been opposition from environmental organizations such as the World Wildlife Fund, the Missouri Botanical Garden, the Wildlife Conservation Society, the Noel Kempff Museum and the Bolivian-based Friends of Nature. The action carried out by these NGOs ended in 1999 with a controversial agreement with Enron, which was also signed by Shell as secondary party to the construction project. In that agreement, the Foundation for the Conservation of the Chiquitano Forest was established and a sum of $30 million promised it, for use in necessary conservation work. But according to village leader Bolnino Socore, the community has received 50 cows and a water well, and little else. Enron, however, with finance for the construction scheme coming from the US Overseas Private Investment Corporation (OPIC) was planning to earn $50 million per year over the 40-year life span of the pipeline project.

Allegations of corruption

According to news reports, original owner Enron included the Cuiabá Pipeline in a transaction to falsely inflate the company's revenue and hide debts and losses and enrich several top Enron executives. Enron bookkeepers recorded a $65 million profit from the project before the pipeline had delivered any gas. But the true numbers show that Cuiabá came in three years late and more than 50 percent over budget, ballooning to $750 million from the estimated $475 million.

Articles and resources

[http://www.eca-watch.org/problems/americas/bolivia/Cuiaba_Indigenous_Report.pdf Cuiabá Gas Pipeline: Social and Environmental Impacts on the Chiquitano Forest] Eco-Watch