Petrobras and its TNG partners are pushing ahead with controversial plans to build a $350 million gas pipeline from the Urucu field across the Amazon rainforest, despite environmental groups crying foul over the project and taking their fight to the courts.
The TNG consortium, formed by Petrobras (50%), El Paso (25%) and CS Participacoes (25%), has obtained a suspension of previous legal action against it by offering a donation of 10.5 million reals ($3.4 million) for sustainable development projects in the area of influence of the 550 kilometre pipeline.
A legal document signed by the Federal Public Ministry in Brasilia and seen by Upstream says the Brazilian environmental agency Ibama will continue with the licensing process for the pipeline, which had previously been stopped by a judicial decision of the Federal Justice. The Brazilian forum of non-governmental organisations, comprising environmental groups and a local trade union coalition, have met with Environment Minister Marina Silva and Ibama president Marcos Barros to complain over the so-called environmental donation in the strongest possible terms.
The document shows that TNG has promised to give the 10.5 million reals to the government of Amazonas to implement a sustainable development plan for the communities around the proposed pipeline from Urucu to Porto Velho in Rondonia State.
“We questioned how Ibama could seemingly take part in a deal that we consider an illegal exchange,” warned Roberto Smeraldi, director of Friends of the Earth in Sao Paulo
“It seems TNG is buying off its need to comply and respect environmental legislation by making a donation this would set a very dangerous precedent for Brazil.”
Environmental and union groups have fought a long-running battle in the Brazilian courts against the proposed pipeline. They claim there is still more than enough gas available at a cheaper price from Bolivia, which could supply El Paso’s thermoelectric plant in Rondonia.
“What is the reason for this crazy pipeline, just to serve a thermoelectic plant, when we are still paying for capacity in the Brazil-Bolivia pipeline, which we are not using,” said Smeraldi.
He claimed minister Silva seemed “a bit embarrassed” over the whole issue and that she promised she would look into the matter and arrange a further meeting with the non-governmental organisations (NGOs).
However, Barros maintained Ibama would still grant the final licence to TNG to build the pipeline, based on the legal issues, whether or not the document granting the donation was eventually agreed.
The NGO’s have raised strong fears the pipeline route, which cuts across the rainforest, could open the door for a mass migration of lumberjacks, miners, plantation owners and other workers into pristine areas.
In some cases, these areas are inhabited by indigenous groups that live in complete isolation and are vulnerable, such as the Apurina, Paumari, Deni and Juma tribes.
Environmental groups have accused El Paso of trying to buy its way into Brazil.
Sven Wolff, Petrobras general manager for Solimoes basin E&P business unit, told Upstream the company hoped to start building the line from Urucu to Porto Velho at the end of this year.
“Our gas from Urucu will be cheaper than Bolivian gas,” he claimed.
Wolff said there was “no problem in the Federal Justice, who are satisfied with our plan”, though TNG was still preparing some additional information asked for by the Public Prosector.
“The pipeline will not have a service road running alongside, but just a number of helicopter landing points along its route for security reasons. We have also tried to take the route well away from indigenous lands,” he claimed.
