April 10 (Bloomberg) -- Brazil may make up for a reduction in natural gas deliveries by tapping hydroelectric reserves that have grown because of seasonal rainfall.

Brazil's Energy Ministry late April 7 rationed natural gas deliveries to power generators and fuel distributors after rains in Bolivia damaged a pipeline that supplies half of Brazil's needs. Gas supplies were cut to distribution companies by 12 percent and to generators by 72 percent.

The cutbacks are unlikely to hurt economic growth in Brazil because of sufficient water supplies, said Altino Ventura, a partner at Orion Consultores and former president of Itaipu Binacional, the world's largest hydroelectric power station.

``There is almost no chance that the gas cut will have any impact on Brazil's ability to generate electricity or hurt economic activity,'' Ventura said in a phone interview in Rio de Janeiro. ``Most of Brazil's power comes from hydro and the reservoirs have more than enough to make up the shortfall.''

Reservoirs are 86 percent full in Brazil's industrialized southeast, according to the Web site for the ONS, a non-profit company that manages Brazil's electricity grid. The region, which includes Brazil's three largest cities, depends the most on Bolivian natural gas to fuel power plants used to add electricity during peak periods.

Petrobras

Petroleo Brasileiro SA, Brazil's state-controlled oil company, will cut natural gas use by 51 percent at refineries to raise supplies, a statement from the Energy Ministry said.

Petrobras's shares rose 20 centavos, or 0.5 percent, to 44.03 reais at 10:51 a.m. New York time at the Sao Paulo stock exchange.

Determining the effect of rationing on individual generators that use natural gas is much more difficult, Ventura said. The effect would depend on the amount of time rationing was in place and specifics of the contract each had, he said.

``It's really too early to tell what the impact on each generator would be,'' he said.

A call to Eletrobras SA, the state-controlled utility holding company that has investments in gas-fired generation wasn't answered. Eletrobras' preferred shares fell 2.65 reais, or 4.8 percent, to 52.35 reais.

Flooding and landslides in Bolivia April 4 uncovered an 800-meter (2,625-foot) stretch of the Bolivia-Brazil Natural Gas Pipeline, Rio de Janeiro-based Petrobras, the pipeline operator, said in a statement.

Roadblocks set up by groups protesting Bolivia's policies for distributing energy royalties limited repair efforts until they were removed April 8, according to Petrobras' press office.

As a result of the damage, pipeline output has fallen by about 7 million cubic meters a day, 14 percent of Brazil's daily use, reducing deliveries from the Bolivia pipeline to about 19 million cubic meters a day from 26 million cubic meters, Petrobras said.

To contact the reporter on this story: Jeb Blount in Rio de Janeiro at jblount@bloomberg.net

Last Updated: April 10, 2006 11:00 EDT