President Michelle Bachelet announced on Thursday that Chile would invest 650 million dollars to build a new liquefied natural gas (LNG) terminal and strengthen the state-run oil company in an effort to deal with a mounting power crunch.
An LNG terminal, Chile's third, would be built in the central-south region of the country, alongside the already running Mejillones in the mineral-rich north and centrally-located Quintero, which is set to also be expanded.
We want more LNG in electricity generation, with greater availability of re-gasification terminals, Bachelet said.
Power projects in Chile have increasingly faced strong public opposition on health and environmental grounds, often winding up entangled in regulatory limbo and litigation.
State oil company Empresa Nacional del Petroleo (ENAP) would participate in the construction of the new LNG terminal, and the energy plan included an extra 400 million to bolster the debt-plagued firm.
But experts warn that LNG is no silver bullet, and much depends on whether its price falls well below that of coal.
The government estimates that its energy drive will help add a little over 6,000 megawatts to Chile's current matrix of roughly 18,000 megawatts by 2025. Like many of its emerging market peers, Chile is struggling to strike a balance between its power-hungry mining industry and the environment.
Illustrating the social challenge, a small group of protesters demonstrated in front of the La Moneda palace on Thursday to protest the Alto Maipo hydropower project, which they say could harm Santiago's water supply and ecosystem.