Oct. 27 (Bloomberg) -- Uruguay, Paraguay and Bolivia are in talks with the World Bank for a loan to finance a natural-gas pipeline shared by the three countries, Uruguay’s deputy minister for industries, energy and mining said.

“The World Bank is committed to helping the three countries finance the project,” Minister Roberto Kreimerman, said in an interview in his Montevideo office on Oct. 26. “This is a solid project, not something that is in the air.”

Uruguay is a net natural-gas importer, while Bolivia holds South America’s second-largest reserves of the fossil fuel. Paraguay also imports gas. The three countries this year revived their decades-old integration union known as Urupabol.

Kreimerman, 51, declined to estimate the pipeline’s cost. ABC, Paraguay’s top-circulation newspaper, on Oct. 20 cited unnamed sources estimating the price tag at $3 billion.

The conduit would have to pass through Brazil or Argentina to connect with the three countries as Uruguay doesn’t share a border with Bolivia or Paraguay, Kreimerman said.

“We are also studying the possibility of using Argentine pipelines to transport natural gas from Bolivia to Uruguay and expect definitions on the matter before the end of the year,” said Kreimerman, who is a chemical engineer and holds a master’s degree in finance and international commerce.

“Uruguay has more than enough hydroelectric supplies of its own but is highly dependent on imports for hydrocarbons,” said Kreimerman. “Both the pipeline project and the possible use of Argentine gas pipelines are aimed at ensuring our gas supplies.”

Venezuela holds the continent’s largest gas reserves.

To contact the reporter on this story: Rodrigo Orihuela in Buenos Aires at rorihuela@bloomberg.net.

Last Updated: October 27, 2009 11:17 EDT