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Friday, December 08, 2006

Chavez promotes South American gas pipeline

BRASILIA, Brazil (AP) -- Newly re-elected Venezuelan leader Hugo Chavez received a bear-hug welcome Thursday from Brazilian President Luiz Inacio Lula da Silva as he began a tour promoting a South American alliance and a vast natural gas pipeline.

Chavez and Silva agreed to relaunch and accelerate technical studies on the pipeline project as the Venezuelan president made his first stop on a continental visit with leaders of ideologically friendly nations.

Chavez acknowledged that plans for the pipeline fell by the wayside this year while both leaders were campaigning for re-election.

Chavez said a decision on when to lay the first stretches of the pipeline between Brazil and Venezuela will be made in January, but that he did not know if construction could start in 2007.

He pitched the pipeline as one of the most effective ways to unite South America, creating an energy network that would eventually reach Argentina, Bolivia, Paraguay and Uruguay, and possibly other nations.

"This is the most important project ever contemplated for the continent," Chavez said.

The proposed $20 billion pipeline would stretch 9,000 kilometers (5,600 miles) and provide an outlet for Venezuela's gas reserves -- the largest in South America -- while averting possible natural gas shortages in the future for Argentina and Brazil.

The two nations have Latin America's largest economies and depend heavily on the fuel for power generation and for cars and cooking.

But environmentalists warn the pipeline would be an ecological disaster because it would cut through the Amazon and oil analysts say the price could be much higher than initial estimates.

Chavez has dismissed those arguments and is pushing the plan as a way to feed South America's energy needs without investment from traditional sources such as multinational companies.

He also said that Venezuela would evaluate recent overtures from U.S. officials to try to improve sour relations, but added that he is receiving the signals "without much hope."

After Chavez's re-election, the U.S. ambassador in Caracas expressed Washington's willingness to seek a less conflictive relationship. Chavez snubbed that, saying if the U.S. was sincere, it would halt the war in Iraq and take other steps. The U.S. government has not directly congratulated Chavez on his victory.

After meeting with Silva, Chavez headed to Argentina to meet with the center-left President Nestor Kirchner before continuing on to Uruguay and Bolivia, which is hosting a South American summit sure to showcase the region's tilt to the left.

The trip is Chavez's first since he cruised to re-election Sunday, continuing a string of leftist victories in Latin America including former Sandinista rebel Daniel Ortega in Nicaragua -- who visited Chavez in Venezuela on Tuesday -- and economist Rafael Correa in Ecuador. Silva was also re-elected in October.

Analysts say Chavez is trying to build on his landslide win to advance Latin American integration as a counterweight to the United States, an idea that resonates across much of the continent.

"He is very astute in seizing such opportunities," said Michael Shifter, an analyst at the Inter-American Dialogue think tank in Washington. "The timing seems right, after his resounding win, Lula's re-election, Ortega's comeback and Correa's new face of the left."

Chavez and Silva also discussed a proposed $2.5 billion refinery in Silva's home state of Pernambuco to process heavy crude from Venezuela's Orinoco Belt and Brazilian offshore fields.

The two-day South American summit starting Friday in Cochabamba, Bolivia, is hosted by Evo Morales -- a Chavez ally who was elected last December as Bolivia's first Indian president.

Silva and Chavez enjoy friendly relations, though the Brazilian is widely considered more moderate. Silva is cordial with Washington, while Chavez frequently rails against the U.S. "empire" and refers to U.S. President George W. Bush as "the devil."

Silva believes Chavez's re-election marks another sign of political and social change sweeping the continent, the presidential press office said.
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