MercoPress. South Atlantic News Agency

Chilean irritation with Argentina.

The Chilean government reiterated this Monday its irritation with Argentina following Buenos Aires decision to reduce natural gas exports to Chile. “International agreements are based in good faith”, underlined Chilean Ministry of Interior Jose Miguel Insulza confirming Chile's dissatisfaction with Argentina's attitude.

"Good faith means every country makes maximum efforts to fully honour accords, and we're not satisfied that maximum efforts have been made", insisted Mr. Insulza.

Last April 1, Argentina reduced the natural gas supply to Chile by 2,3 million cubic metres per day, which has complicated the country's energy matrix since 25% of electricity is generated with Argentine natural gas.

Mr. Insulza's strong words follow similar statements on Sunday from Chilean president Ricardo Lagos who described relations with Argentina "shredded". "This (gas supply reduction) is a most serious incident for mutual trust, reliability, between two neighbouring countries that have worked on many agreements, which then are not honoured, we're facing a strong loss of confidence", stressed President Lagos. "I can understand President Kirchner's internal policies reasons for this (reduction) decree. I can't say what Mr. Kirchner must do, but I can talk about the consequences for relations with Chile. Relations have been quiet shredded".

However President Lagos was quick to ensure Chileans that "people can rest assured" that there won't be any gas or electricity shortages in the country.

"Most probably electricity rates will be increased 2 to 3% as a consequence of having the combined cycle generating plants working with liquid fuel that is more expensive", anticipated Mr. Lagos.

The president also denied problems with the design of the country's electricity generation program "since, with advanced technology we will in the near future be receiving natural gas by pipeline but also from ships".

However Joaquín Lavín leader of the opposition blasted the president for not showing a strong stand with Argentina, "a contract has been breached and absolutely nothing is happening this is unbelievable!"

Mr. Lavín added that having Argentina as virtually the only source of natural gas "makes Chile energy dependent from Argentina, a major mistake we will all have to pay".