Chile ready to begin pumping natural gas into Argentina

After Argentina cut off its natural gas exports to meet its own domestic demand, the Chilean government in a consortium with private companies built a re-gasification terminal and plant that recently came on line to supply local gas needs.

It is technically feasible to direct gas over the existing Gas Andes pipeline that runs from central Chile into Argentina or the Gasoducto del Pacifico pipeline in central-southern Chile should the need arise, according to Chilean government documents.

The Finance Ministry issued a decree modifying customs norms allowing for the sale and export of re-gasified natural gas, according to the newspaper.

Energy Minister Marcelo Tokman said that the re-gasified natural gas sold to third countries is tax free. “Basically since the gas arrives and leaves the country, the fact it crosses Chile is not considered an import or an export, therefore it is fiscally neutral and carries no tariffs”, said Tokman.

He added that Chile was waiting for Argentina to adapt its legislation so the pipelines can be used on both ways and the natural gas considered as “merchandise on transit”.

“We’re coordinating with Argentine Planning minister Julio De Vido”, he added.

Chile inaugurated in October its first natural gas re-gasification plant, as part of its strategy to diversify energy sources at a cost of over a billion US dollars.

Argentina on the other hand suffered during the last decade a dramatic fall in its natural gas reserves because of lack on investment in the industry and frozen prices, which resulted in a considerable contraction of supply even for the domestic market.