Brazil is reportedly in talks with Argentina for the pipeline construction from the Vaca Muerta shale gas reserves in the Neuquen Province of Argentina.

Reuters reported Brazilian President Jair Bolsonaro said on social media that the proposed gas pipeline project was one of the options being considered by the government to reduce its gas price.

Bolsonaro was cited as saying in a weekly live broadcast: “We are in negotiations with Argentina. Gas from Vaca Muerta. It will happen one day. Because it is not easy to start importing gas, you need pipelines.”

The proposed project involves the construction of a 1,430km-long pipeline from the Vaca Muerta reserves in the Neuquen province to Uruguaiana, Brazil.

From there, another 600km-long pipeline would be built to the city of Porto Alegre to connect to the gas distribution network of southern Brazil.

Construction on the Argentina section of the proposed pipeline project is estimated to cost $3.7bn while the Brazilian section is anticipated to cost $1.2bn.

The proposal to build the pipeline was initially made in 2020 by Argentina’s ambassador in Brasilia, Brazil Daniel Scioli during meetings with Brazil President Jair Bolsonaro and Brazilian Mines and Energy Minister Bento Albuquerque.

The Vaca Muerta oil and gas field, which is located in the Vaca Muerta shale basin in the Neuquen Basin, is owned and operated by Argentina’s state-owned oil and gas company Yacimientos Petrolíferos Fiscales Sociedad Anónima (YPF).