Termocanoas, Termogaucha to merge

Respective shareholders of the Termocanoas and Termogaucha thermoelectric plants in southern Brazil will shortly agree to consolidate the two plants into one, Rio Grande do Sul state energy mines and communications minister Valdir Andres said, according to a report in Gazeta Mercantil. A single consolidated plant would anchor demand for the extension of a gas pipeline from Uruguaiana on the Argentine border to Rio Grande do Sul state capital Porto Alegre. Partners at the US$300mn, 500MW Termogaucha project are Brazil's federal energy Petrobras, Brazilian oil company Ipiranga, Spain's Repsol YPF and state electric power distributor CEEE, while Petrobras and the Petros pension fund own the 500MW Termocanoas project. The projects were originally set to have 500MW capacity each, but the merger would create a single 500MW plant. Termocanoas started 160MW first stage operations in July 2002, while Termogaucha, which at one point was expected to double capacity to 1,000MW by 2006, has still not made it off the drawing board and in March this year was scheduled to start initial operations in December 2004. The Uruguaiana pipeline extension would provide Argentine gas at lower prices than Bolivian gas, as well as freeing up availability of Bolivian gas in other parts of Brazil, according to Claudia Hofmeister, a director at gas transport company TSB. TSB is the likely constructor of the 615km extension to Porto Alegre, which is estimated to cost US$500mn.