Bolivia’s state-owned energy company Yacimientos Petrolíferos Fiscales Bolivianos (YPFB) will be able to supply about 2.5 million cu feet of natural gas per day to India-based Jindal Steel & Power’s steel project in the South American country.
YPFB will invest about $1.5 billion to meet Jindal’s natural gas needs from 2014. This will include the drilling of new rigs, expansion of production capacity and the construction of a gas pipeline, Bolivian state-run miner Comibol said.
Jindal’s total natural gas needs are as yet unconfirmed, but may reach 10 million cu feet per day, Comibol said.
“Once the volume is defined, YPFB can analyse options to gradually increase its gas supplies,” it added.
The supply contract between YPFB and Jindal has yet to be signed.
Jindal plans to invest $2.1 billion to set up an integrated 1.7 million-tpy steel plant, a 6 million-tpy DRI plant and a 10 million-tpy iron ore pellet plant.
The investment also includes acquiring the development rights to 20 billion tonnes of iron ore reserves at El Mutun in Bolivia.
Commercial shipments of iron ore commenced last year, the Indian steelmaker said.
Bolivia does not currently produce any steel, importing all its needs.
Ana Paula Camargo