Petrobras (PBR)

Urucu-Manaus gas transporter granted BNDES funding

(Rio de Janeiro, December 12, 2007). – PETRÓLEO BRASILEIRO S/A - PETROBRAS, [Bovespa: PETR3/PETR4, NYSE: PBR/PBRA, Latibex: XPBR/XPBRA, BCBA: APBR/APBRA], a Brazilian international energy company, announces that the National Economic and Social Development Bank (BNDES) granted funding, worth R$2.49 billion, to the Transportadora Urucu-Manaus S.A. special purpose company (SPC), in charge of building the 383-km long, 20-inch in diameter natural gas transportation pipeline to connect Coari to Manaus, and of building distribution branches to serve seven municipalities located along the gas pipeline’s course. The funds will also be used to build the 279-km, long 10-inch nominal diameter liquefied petroleum gas (LPG) pipeline that will connect the Arara Pole, in Urucu, to the Solimões Terminal, in Coari, State of Amazonas.

The natural gas will be used initially for thermoelectric power generation in the city of Manaus, substituting for the fuel oil generators that are currently used for this purpose. Later, it will also supply the region’s industrial, vehicle, commercial, and residential sectors.

The gas pipeline will have two delivery points in Manaus, seven distribution branches totaling 126 Km in length, to deliver gas to municipalities located near the gas pipeline, and two intermediary gas-compression stations. The project also foresees the re-adaptation of an existing 18-inch nominal diameter pipeline between Urucu and Coari, which will be interconnected to the 20-inch one, allowing for natural gas production outflow.

The gas pipeline’s initial flow capacity will be 5.5 million cubic meters of natural gas per day, and is expected to go online in December 2008.

With regard to socioenvironmental responsibility, a collaboration agreement was signed with the Amazonas State Government to develop sustainable programs, coordinated by the Sustainable Development Department (SDD), aiming at creating actions capable of mitigating and compensating for the gas pipeline’s environmental impacts. The gas pipeline construction is hoped to generate upwards of 3,000 direct jobs in the state of Amazonas.

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