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Ecuador: US Company Drops Bid to Build Pipeline

December 7th, 2000

QUITO, Ecuador -- U.S.-based Williams Cos. Inc. has dropped its bid to build a heavy crude pipeline in Ecuador, a company spokesman said on Thursday.

Williams had hoped to clinch a government contract to build a duct to carry a maximum of 434,000 barrels of crude daily, at a construction cost of $544 million.

The company had been competing for the project with OCP Ltd, a consortium made up of Alberta Energy Co. Ltd. , Agip Petroleum, Kerr-McGee Corp., Occidental Petroleum Corp., Repsol-YPF and Argentine construction firm Techint.

But Williams spokesman Gustavo Romero said the company decided to pull out of the bidding after the government announced plans in November for two -- and not one -- pipeline, to be built. ''There isn't enough crude for two companies, and as a result, there's no reason to build two pipelines,'' Romero said.

Ecuador is Latin America's sixth-biggest oil producer and its fourth-biggest exporter. Currently, the country has one pipeline, the SOTE, which transports about 380,000 barrels of crude per day. A heavy crude pipeline would enable private companies to transport oil independently of state-oil company Petroecuador, preventing the mixing of different grades of crude.

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