Chilean company demands Argentine gas suppliers.
A Chilean private utility company and its electricity generating facility in Santiago confirmed this Sunday they have presented a demand in an international tribunal against Argentine private natural gas suppliers.
The legal presentation of AES Gener, (Chile's main thermal energy producer) and Santiago Electricity is before the International Arbitrage Court which depends from the International Chamber of Commerce and involves Consortium Sierra Chata from Argentina. AES Gener is a subsidiary from the United States AES corporation.
Chilean companies are demanding that the consortium deliver all the supply contracted and pay compensations for the losses generated by the cut in the provision of natural gas.
Argentina's energy crisis forced local companies to drastically cut their supply of natural gas to Chile which is 90% dependent on its neighbor. Furthermore 37% of all electricity in Chile is generated from Argentine natural gas.
Argentina's natural gas supply restrictions has been particularly severe for Chilean electricity generating plants in the north and center of the country as well as the methanol complex in Punta Arenas.
AES Gener reported that its main electricity plant in Santiago faces a supply contract restriction of 30% equivalent to 1,7 million cubic meters per day. The natural gas supply restriction has forced Chile to purchase other more expensive fuels to compensate and this has been passed on to the electricity and residential gas bills.
The Chilean government has complained bitterly that the limiting of supply is a breach of contract but Argentina has argued that Argentine law indicates that domestic demand, in an energy crisis scenario, has priority over exports. After weeks of strong statements both governments decided the controversy about energy supply was over, but this is not necessarily extensive to private companies involved in the dispute.