MIAMI, July 11 (UPI) -- South American neighbors Colombia and Venezuela have kicked off an ambitious gas pipeline project that Venezuelan President Hugo Chavez claims will supply the region with fuel for the next "100 years."
"This is part of a big project that will be the product of working together," said Chavez over the weekend at a ceremony in western Venezuela attended by his Colombian counterpart, Alvaro Uribe.
According to Venezuelan Oil Minister Rafael Ramirez the project will cost neighboring nations a combined $335 million and is scheduled to begin operation by Spring 2007.
Although the outspoken leftist Chavez and the conservative Uribe have not always seen eye-to-eye on the political front, Venezuela and Colombia share billions of dollars in business annually and the new pipeline promises to add to the revenue flow.
The two leaders do agree, however, that energy integration in Latin America is crucial for the future success of the region.
"President Chavez has described his dream of gas, oil and energy integration many times ... it must become a reality," said Uribe.
While the Colombian leader is an ardent supporter of the Bush administration, Chavez is one of the region's most vocal critics, making them somewhat strange bedfellows.
The Venezuelan president has made a point of asserting that Latin American countries must become less reliant on the United States and forge stronger trade relations among themselves and with alternative trade partners like China. He noted that he would like to see the pipeline extend all the way across Colombia to the Pacific Ocean for export to Asian markets.
Over the last few months, Chavez has been busy courting Beijing and others closer to home hoping to sell them on Venezuela's vast gas reserves, the largest in Latin America, estimated at 148 trillion cubic feet of natural gas reserves.
In that spirit, Panamanian President Martin Torrijos was also on hand for the pipeline ceremony. A study will be conducted, said Ramirez, to determine the cost of extending the pipeline into Panama.
A flow of Venezuelan and Colombian gas into Panama would make the country less dependent on the United States, said Chavez.
Analysts agree the Venezuelan president appears willing to spend the billions of dollars in state oil and gas revenue to exert his particular brand of influence on the region.
"Obviously Venezuela is trying to expand its sphere of influence in Latin America," said John Kilduff, an energy analyst at Fimat USA Inc.
Part of that effort is an even more ambitious pipeline proposal by Chavez that would stretch from northern Venezuela to the tip of South America, fueling Brazil, Uruguay and Argentina with Venezuelan gas.
Critics of the multi-billion dollar ideal say that a pipeline extending through thousands of miles of jungle thicket and desolate mountains would make the project prohibitively expensive, even for a Venezuela awash in oil revenue amid record-high global prices.
Meanwhile, to the north, Chavez could be facing some competition from other Latin American nations hoping to capture a piece of the Central American energy market.
In a meeting last month among representatives from 10 Central American nations, a proposal was floated for the creation of a $6.5 billion refinery that would pump an estimated 360,000 barrels a day. Both Panama and Guatemala are reportedly being considered by private, and yet unnamed investors, to host the facility.
The plant would, in theory, be able to produce refined oil at $8 less a barrel than the going world market rate, said Mexican energy officials at the summit.
Mexican President Vicente Fox appears to be gearing up to challenge Chavez for Latin American energy supremacy by taking the lead on the projects discussed at the summit.
The Mexican leader harbors ambitions to challenge the Chavez-led PetroCaribe initiative, in which Venezuela provides Caribbean nations with Venezuelan petroleum at a reduced price.
"There is definitely some competition going on [between Fox and Chavez] in Central America," Kilduff opined.
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