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Bolivia and Brazil agree gas deal | Bolivia and Brazil agree gas deal |
(about 8 hours later) | |
Bolivia has reached agreement on a price increase over its natural gas exports to Brazil. | |
The deal, signed by Brazilian President Luis Inacio Lula da Silva and his Bolivian counterpart Evo Morales, ends months of dispute over the issue. | |
Under the agreement, Brazil is expected to pay at least $100m more a year for its gas, officials said. | |
Negotiations began last year, when Mr Morales said an increase in the price would help lift Bolivia out of poverty. | |
Brazil depends on Bolivia for 50% of its daily gas supply. Last year, it paid nearly $1.3bn for Bolivian gas. | |
Complex formula | |
At a ceremony in Brasilia to mark the signing of the agreement, Mr Morales said: "This accord leaves us strengthened and allows us to deepen our democracy." | |
For his part, President Lula said natural gas was "of fundamental importance" for the integration of the Brazilian and Bolivian economies. | |
The deal does not actually increase the basic price that Brazil pays for Bolivian natural gas, which is already contained in the contract between the two countries. | |
However, Bolivia will now be allowed to charge more for individual components of the gas, such as ethane, butane and liquid petroleum gas, according to a complex formula based on calorific content. | |
Last year, the Bolivian government signed a deal that more than tripled natural gas exports to Argentina at increased prices. | Last year, the Bolivian government signed a deal that more than tripled natural gas exports to Argentina at increased prices. |
Mr Morales was elected in December 2005, with his promise to nationalise Bolivia's energy industry being a key promise. | Mr Morales was elected in December 2005, with his promise to nationalise Bolivia's energy industry being a key promise. |