Introduction

Discussions of trade in natural gas in South America's Southern Cone (Argentina, Bolivia, Brazil, Chile, Paraguay, and Uruguay) began as early as the 1950s. But it was not until 1972 that the first international gas pipeline in the region, linking Bolivia and Argentina, was built. It was twenty years later before significant gas pipeline projects integrating Chile and Argentina were proposed, followed by one large project connecting Bolivia and Brazil (see the map in figure 6.1.)

This chapter examines three historical cases to understand why there was a twenty-five-year lag between the first international pipeline project and the others, and to uncover the key factors that determine why particular pipeline projects were built while similar proposed pipelines languished. The 1970s pipeline, “YABOG,” linked Bolivia and Argentina and competed with an alternative project to send Bolivian gas to Brazil. Information on this pipeline project is limited, as the main financier of the project, the World Bank, has not yet released its records. The YABOG case thus serves mainly as historical background for the contemporary projects. This chapter examines in detail competition in two major gas trade projects in the 1990s. First, it examines the GasAndes pipeline and the competing alternative, Transgas – both projects would transport Argentine gas to Chile. Second, it analyzes the decision to supply Brazil with Bolivian gas (via a pipeline known as GasBol) rather than Argentine gas (via the Paraná–Porto Alegre project).