Mexico Interested in Gas From Bolivia, Peru

LA PAZ, Bolivia
Mexican State Energy Company Still Interested in Gas From Bolivia and Peru

Mexican officials said Thursday they are still interested in gas from Peru and Bolivia, though newly elected Bolivian President Evo Morales has pledged to bring more state control over the country's gas reserves and re-negotiate contracts with foreign energy companies.

Mexico's energy secretary, Fernando Canales, met with top Bolivian officials Thursday and said they "emphasized the association between Mexico and Bolivia, through our companies Pemex and YPFB, to export Bolivian gas to the U.S. through a pipeline that we're in the process of building."

Bolivia has the second-largest natural gas reserves in South America, after Venezuela, and already sends its gas via pipeline to Brazil and Argentina.

A 2001 proposal to send Bolivian gas to the U.S. in a pipeline through Chile, a historic enemy of Bolivia, was scuttled after it caused massive street protests that helped lead to the resignation of then-President Gonzalo Sanchez de Lozada.

Morales has pledged to rebuild Bolivia's state energy company Yacimientos Petroliferos Fiscales Bolivianos, which was partially privatized in the 1990s and is a merely bureaucratic entity now.

The meeting comes after tensions arose between Morales and Mexican President Vicente Fox in January.

Expressing his frustration on being unable to make a deal to import Bolivian gas, said "The new government apparently has said that Bolivia's gas will not be exported," Fox said, Either they are going to consume it or they are going to eat it. They have a lot of gas to export."

Morales responded by asking Fox to have more respect for his country.