El Paso begins construction of 700 MW Brazil project

By an OGJ Online Correspondent

Rio de Janeiro, Apr.4, 2001—El Paso Energy International, a unit of El Paso Corp., has begun construction of a $500 million, 700 MW gas-fired power plant in Macae, Rio de Janeiro, that is expected to help relieve Brazil’s projected electricity shortfall when it begins initial operations this fall.

The plant will start operating in October with a capacity of 200 MW.

Roberto Almeida, El Paso’s vice-president for Latin America’s Southern Cone, said 4.7 million cu m of natural gas will be consumed daily from Campos basin, Brazil’s richest oil province. At present this gas is being flared by Petroleo Brasileiro SA (Petrobras) due to lack of purchasers, said a Petrobras official.

The El Paso plant will be located near Macae, the closest city to Campos basin, in a region that has a primary network power distribution system which will allow the energy generated by El Paso to reach the country’s southern and southeastern regions.

Wagner Victer, Rio de Janeiro’s energy secretary, told OGJ Online Rio de Janeiro state will have completed power projects totaling 12,000 MW and $5 billion in investments by 2004.

“Brazil is following the world tendency to invest in thermoelectric plants to avoid possible blackouts,” said Almeida. Brazil is facing blackouts because 80% of the country’s electricity supply depends on hydroelectric power plants and the country is experiencing a severe drought.

El Paso intends to invest $930 million in 2001-2002 on power projects in Brazil. Another $1 billion will be invested in petroleum exploration and production, Almeida said.

Besides the Macae plant, El Paso is investing $250 million in a power plant in Porto Velho, Rondonia, and has a 60% stake in a power project in Araucaria, Parana. Investments of $350 million are expected in this project. Another $180 million will be invested in the power plant Norte Catarinense in Joinville, Santa Catarina.