Bolivia eyeing natgas exports to Paraguay, Uruguay

By Eduardo Garcia

LA PAZ, Dec 17 (Reuters) - Although Bolivia is struggling to honor natural gas export commitments due to low output, the Andean country aims to start exporting fuel to Paraguay and Uruguay by 2014, the energy ministry said on Wednesday.

Bolivia signed an energy integration agreement with both Paraguay and Uruguay on Tuesday which calls for deeper energy ties between the three countries, energy ministry spokesman Ever Teran told Reuters.

"Bolivia wants to start exporting natural gas to Uruguay and Paraguay in the medium term ... by 2014," said Teran, adding the deal calls for the creation of a commission that, among other things, would look into the best way to transport the fuel.

The impoverished South American nation has the second largest natural gas reserves in the region after Venezuela, but it is struggling to meet demand from buyers Brazil and Argentina due to low production capacity.

Bolivia has a contract to export up to 7.7 million cubic meters of natural gas a day to Argentina but it is only sending some 2 million cubic meters a day to its wealthier neighbor.

In 2006, Bolivia signed a deal to nearly quadruple natural gas exports to Argentina to 27.7 million cubic meters a day in the near future.

Leftist President Evo Morales nationalized the country's energy industry in mid 2006, arm-wrestling foreign oil firms like Brazil's Petrobras (PETR4.SA), Spain's Repsol (REP.MC) and Total (TOTF.PA) into paying more taxes.

The government has complained that foreign companies are not investing as much as they had agreed to during the nationalization process, and has pledged to invest up to $1.5 billion next year though state-run energy company YPFB to boost fuel production.