Chavez keeps up South American energy diplomacy

MONTEVIDEO Wed Aug 8, 2007 5:54pm EDT

1 of 2. Venezuela's President Hugo Chavez gestures during his speech after signing agreements at Uruguayan presidential house in Monteivideo August 8, 2007. Chavez is in Uruguay for an official visit.

Credit: Reuters/Andres Stapff

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MONTEVIDEO (Reuters) - Venezuelan President Hugo Chavez on Wednesday carried pledges of energy investment to Uruguay, the latest stop on his South American tour aimed at bolstering his regional influence.

Chavez, on the second stop of a four-nation swing, said his country may invest in an Uruguayan plant to regasify liquid natural gas from Venezuela. He made a similar proposal this week in Argentina.

The Venezuelan leader has been offering oil or natural gas to energy-hungry South American neighbors, in an effort to counter Washington's influence in the region.

"We're talking about a regasification plant here too, another in Argentina, where the three countries could converge," Chavez told reporters in Montevideo.

Uruguay, a largely agricultural-exporting country of 3.3 million people wedged between Argentina and Brazil, imports all of its gas and oil supplies, some of which Venezuela provides at cut-rate prices.

A regasification plant in Uruguay could require a $1 billion investment and generate 10 million cubic meters of natural gas a day, said Daniel Martinez, the head of Uruguayan state energy company ANCAP.

Venezuela on Monday signed an agreement to study construction of a regasification plant on the Atlantic coast of Argentina, which has been weathering an energy crisis.

Argentine President Nestor Kirchner, a Chavez ally, has been forced to ration supplies to businesses as annual economic growth of more than 8 percent in the last four years has increased demand.

In Argentina, Chavez also announced Venezuela bought $500 million worth of Argentine debt -- the latest in a string of purchases totaling more than $5 billion in the last two years.

Chavez was scheduled to travel to Ecuador and then on to Bolivia, where Venezuela's state oil company PDVSA plans joint projects with its smaller Bolivian counterpart, YPFB.

Bolivian President Evo Morales said the two countries would launch joint oil and electrical companies this week with an initial investment of at least $670 million.

Chavez said the Argentine and Uruguayan plant proposals were being made since talks on a mammoth gas pipeline running the length of South America had gone "on recess."

"We had been advancing rapidly in the last two years (on this) and suddenly the meetings ended ... We hope they resume. We are proposing a southern gas line to bring Venezuelan gas through Brazil to Uruguay, Argentina and Paraguay," Chavez said. "Venezuela has gas to last 150 years."

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