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 thesubstantial benefits for both Bolivia and Brazil and theinvolvement of reputable private partners, the perceivedrisks and complexities of this large project made financingit a major challenge. The pipeline will link supply in onecountry to a potential market is another. Neither of thesecountries has a tradition of independent regulation oreconomic pricing of fuels. And the pipeline will be thefirst major gas infrastructure project involving the privatesector in Brazil, where the natural gas market isunderdeveloped and the gas distribution infrastructure stillvery limited. This Note explains the historical factors thatshaped the project, how the financing package came together,and the role the pipeline will play in liberalizing theBrazilian hydrocarbon sector.
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