Petrobras – Investor Relations

Petrobras

Investor Relations

GASENE Project

(Rio de Janeiro, December 01, 2005). – PETRÓLEO BRASILEIRO S/A - PETROBRAS, [Bovespa: PETR3/PETR4, NYSE: PBR/PBRA, Latibex: XPBR/XPBRA], a Brazilian international energy company, announces that the Executive Board has approved the contracting of an R$ 800 million bridge loan with  the National Bank for Economic and Social Development (BNDES)by Transportadora GASENE S.A., a special purpose company responsible for implementing the Southeast-Northeast Gas Pipeline Project - GASENE.
 
The Gasene Project comprises three pipeline stretches:  Cabiúnas-Vitória (GASCAV);  Cacimbas-Vitória (already under construction and due for completion in 2006); and  Cacimbas-Catu (GASCAC).
 
The bridge loan will be used to construct the Cabiúnas-Vitória stretch of the pipeline (GASCAV), which extends for 300 km and has a diameter of 28 inches. The Cabiúnas-Vitória stretch has already been granted a preliminary license, an installation permit and a building permit. Construction is scheduled to begin in January 2006, with operational start-up in March, 2007. 
 
When the Cabiúnas-Vitória stretch begins operations in 2007, the pipeline’s Southeast Network will be interconnected as far north as Espírito Santo, allowing it to transport gas from the fields in the north of that state. In this phase of the Gasene Project, the gas will flow from north to south, reinforcing supply to Vitória and the Southeast.  The GASENE pipeline is expected to carry 10 million cubic meters per day in 2007, rising to 20 million cubic meters per day by 2015.

The investments related to this Project are considered in the recently approved Petrobras business plan for the period 2006-2010; the initiative is part of the company’s strategy to develop and lead the brazilian natural gas market by constructing a basic grid connectingthe existing pipeline networks in the Southeast and Northeast of the country, permitting  the company to operate  in a fully  integrated fashion and monetize itsgas reserves.
 
The Financing Contract, representing an advance on long-term financing from the BNDES due for conclusion in mid-2006, will be signed on Monday, December 5, 2005 at the Bank’s headquarters.

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