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2009-04-30

Chile asks Argentina to honour gas contracts

Winter 2008 in Cerro Colorado, a town 30km east of Santiago. With the approach of winter in the southern hemisphere, Chile has asked Argentina to honour its gas supply contracts.

Winter 2008 in Cerro Colorado, a town 30km east of Santiago. With the approach of winter in the southern hemisphere, Chile has asked Argentina to honour its gas supply contracts.

Fernando Sánchez

SANTIAGO, Chile – As winter approaches in the southern hemisphere, Chile is getting ready for the cold. Chilean Foreign Minister Mariano Fernandez has asked Argentina to honour the gas export agreements that, in recent years, Chile charges it has broken to meet its own domestic demand. “We hope they will honour the contracts,” Fernandez told La Nación.  “If they can’t, we are working to ensure that we won’t suffer power cuts”.

According to EFE, a shortage of natural gas for its own power stations in 2004 forced Argentina to reduce its gas exports to Chile. The situation has continued in the years since then, causing power supply problems in winter and summer when demand rises in both countries.

El Mercurio reported that the Argentinian gas pipeline hit its peak in 2004 when it was carrying 10 million cubic metres of gas to Chile each day. The cuts began the following year. According to Infobae, by May 2008 Argentina was delivering only 1.2 million cubic metres a day on average; some days it managed only 500,000.

Fernandez told La Nación that “Chile is taking measures” to cope with the situation “and has taken steps to ensure its energy supply”. It is forging ahead with plans to wipe out an energy deficit which reached its worst level in 2008, thanks to a lethal combination of severe drought, lack of natural gas, high oil prices, and the breakdown of a key power station.

Chile hopes to solve some of its energy problems with a new regasification plant in Quintero, a port just north of Valparaiso and 170km from Santiago. Energy Minister Marcelo Tokman told Xinhua that the first shipment of liquefied national gas was expected to arrive in Quintero in June.

Fernandez said that Chile will also study an offer made by Paraguay to sell its surplus electricity via Argentina’s grid, according to Reuters, and that the three countries concerned had agreed to examine the feasibility of Paraguay’s proposal.

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