Identifier
Created
Classification
Origin
07LAPAZ594
2007-03-02 19:45:00
UNCLASSIFIED
Embassy La Paz
Cable title:
GOB, JINDAL ANNOUNCE GAS PRICE AGREEMENT
how-toVZCZCXYZ0003 RR RUEHWEB DE RUEHLP #0594 0611945 ZNR UUUUU ZZH R 021945Z MAR 07 FM AMEMBASSY LA PAZ TO RUEHC/SECSTATE WASHDC 2702 INFO RUEHAC/AMEMBASSY ASUNCION 6599 RUEHBO/AMEMBASSY BOGOTA 3920 RUEHBR/AMEMBASSY BRASILIA 7808 RUEHBU/AMEMBASSY BUENOS AIRES 5054 RUEHCV/AMEMBASSY CARACAS 2287 RUEHPE/AMEMBASSY LIMA 2387 RUEHMD/AMEMBASSY MADRID 3352 RUEHMN/AMEMBASSY MONTEVIDEO 4455 RUEHNE/AMEMBASSY NEW DELHI 0113 RUEHQT/AMEMBASSY QUITO 4928 RUEHSG/AMEMBASSY SANTIAGO 9518 RUEHUB/USINT HAVANA 0188 RHMFIUU/HQ USSOUTHCOM MIAMI FL RUMIAAA/USCINCSO MIAMI FL RHEGGTN/DEPT OF ENERGY GERMANTOWN MD RUCPDOC/DEPT OF COMMERCE WASHINGTON DC RUEHC/DEPT OF INTERIOR WASHINGTON DC RUEATRS/DEPT OF TREASURY WASHINGTON DC RHEHNSC/NSC WASHINGTON DC
UNCLAS LA PAZ 000594
SIPDIS
SIPDIS
STATE FOR WHA/AND LPETRONI
ENERGY FOR SDAY AND SLADISLAW
COMMERCE FOR JANGLIN
TREASURY FOR SGOOCH
E.O. 12958: N/A
TAGS: EMIN EINV ECON PGOV BL
SUBJECT: GOB, JINDAL ANNOUNCE GAS PRICE AGREEMENT
REF: LA PAZ 574
UNCLAS LA PAZ 000594
SIPDIS
SIPDIS
STATE FOR WHA/AND LPETRONI
ENERGY FOR SDAY AND SLADISLAW
COMMERCE FOR JANGLIN
TREASURY FOR SGOOCH
E.O. 12958: N/A
TAGS: EMIN EINV ECON PGOV BL
SUBJECT: GOB, JINDAL ANNOUNCE GAS PRICE AGREEMENT
REF: LA PAZ 574
1. (U) Days of intense negotiations resulted March 1 in a
final agreement on the price of natural gas (reftel) employed
in the development of Mutun, one of the world's largest iron
ore deposits. India's Jindal Steel and Power agreed to pay
$3.91 per million British thermal units (BTU) for gas used in
exploration and exploitation activities and $1.955 (half the
above price) for gas used in a proposed thermoelectric power
plant.
2. (U) Minister of Mining Jose Dalence noted that the average
price weighted by volume (gas will be split 70/30 between
exploration and power generation) would be $3.32 per million
BTU. The GOB and Jindal agreed to allow prices to fluctuate
with international prices but left discussion of appropriate
methodology for a later date.
3. (U) Comment: The two parties may have reached agreement on
gas prices, but key issues remain unresolved, and the details
of any final contract remain unclear. According to press
reports, Jindal has 45 days in which to acquire local legal
standing and fulfill other terms of its most recent
"pre-agreement" with the GOB, including the presentation of
some means of guaranteeing its intent to invest up to $2.1
billion in the project. If past experience is any
indication, however, the 45-day cut-off will likely slip by
as quietly as earlier deadlines. End comment.
GOLDBERG
SIPDIS
SIPDIS
STATE FOR WHA/AND LPETRONI
ENERGY FOR SDAY AND SLADISLAW
COMMERCE FOR JANGLIN
TREASURY FOR SGOOCH
E.O. 12958: N/A
TAGS: EMIN EINV ECON PGOV BL
SUBJECT: GOB, JINDAL ANNOUNCE GAS PRICE AGREEMENT
REF: LA PAZ 574
1. (U) Days of intense negotiations resulted March 1 in a
final agreement on the price of natural gas (reftel) employed
in the development of Mutun, one of the world's largest iron
ore deposits. India's Jindal Steel and Power agreed to pay
$3.91 per million British thermal units (BTU) for gas used in
exploration and exploitation activities and $1.955 (half the
above price) for gas used in a proposed thermoelectric power
plant.
2. (U) Minister of Mining Jose Dalence noted that the average
price weighted by volume (gas will be split 70/30 between
exploration and power generation) would be $3.32 per million
BTU. The GOB and Jindal agreed to allow prices to fluctuate
with international prices but left discussion of appropriate
methodology for a later date.
3. (U) Comment: The two parties may have reached agreement on
gas prices, but key issues remain unresolved, and the details
of any final contract remain unclear. According to press
reports, Jindal has 45 days in which to acquire local legal
standing and fulfill other terms of its most recent
"pre-agreement" with the GOB, including the presentation of
some means of guaranteeing its intent to invest up to $2.1
billion in the project. If past experience is any
indication, however, the 45-day cut-off will likely slip by
as quietly as earlier deadlines. End comment.
GOLDBERG