June 9 (Bloomberg) -- Bolivian unrest may curtail natural gas supplies to Brazil, South America's largest economy, within days, leaving its industrial heartland without adequate energy to run factories and electricity plants.

Road blocks and plant occupations by Bolivia's indigenous groups may choke gas flows through the Bolivia-Brazil pipeline within the week, said Miriam Guaraciaba, press spokeswoman for Rio de Janeiro-based Petroleo Brasileiro SA, Brazil's state- controlled oil company.

Brazil's energy ministry is drafting a plan with industry groups to reduce demand for gas should supply disruptions occur, said Maria das Gracas Foster, the ministry's top gas official. Bolivia supplies more than half of Brazil's natural gas and 75 percent of Bolivian gas imports go to Sao Paulo, Brazil's most populous and industrialized state.

``If this should become a problem, we'd be in trouble,'' said Jose Sergio Gabrielli, Petrobras's chief financial officer at an event to inaugurate a new offshore oil production ship in Rio de Janeiro. ``There is no way we can immediately replace Bolivian supply.''

For Brazil and Petrobras, the first problem is the occupation of an oil storage facility owned by Transredes SA, Guaraciaba said. Transredes is a Bolivian energy transportation company controlled by Bolivian pension funds, the Royal/Dutch Shell Group and Prisma Energy International Inc., according to its Web site. The facility stores liquids removed from gas before shipment to Brazil. Without access to the storage, gas production may have to be reduced or stopped, Guaraciaba said.

Industrial Customers

Brazil imports about 24 million cubic meters of natural gas a day from Bolivia, more than half of the approximately 45 million cubic meters a day of gas the country uses, Guaraciaba said. Most of that gas is used by industrial customers and consumer gas distributors in Sao Paulo state.

Brazil is in the process of developing new gas supplies in offshore fields near Rio de Janeiro to supply Brazil's energy- poor Northeast with gas and provide alternatives to Bolivian supply. Pipelines to ship the gas won't be complete for several years.

Protesters, who have closed off roads to, La Paz, Bolivia's capital, want Bolivia to nationalize local operations of foreign oil companies, including Petrobras. Street battles between police and dynamite-hurling protesters triggered the resignation earlier this week of president Carlos Mesa, who remains in office until Congress chooses a successor.

Protesters have also occupied Bolivian operations of Spain's Repsol YPF SA and British Gas Plc.

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

Last Updated: June 9, 2005 11:39 EDT