MercoPress. South Atlantic News Agency

Bolivian natural gas for Argentina.

Bolivia finally agreed to sell Argentina natural gas, although insisting that the fuel does not end in Chile, with which La Paz maintains a long-standing territorial dispute

The agreement was signed this Wednesday in Buenos Aires during Bolivian president Carlos Mesa official visit to Argentina. Besides natural gas, president Nestor Kirchner and Carlos Mesa signed understandings on migration, trade and investment

President Mesa said the agreement was retribution to the solidarity shown by Argentina during most of the last decade when she continued to purchase unneeded Bolivian gas and so helping the landlocked money strapped neighbour. The deal is geared to help Argentina face its growing supply shortage in the domestic market and "the need to capitalize" Bolivia's massive reserves of natural gas. Bolivia will supply up to 4 million cubic meters of gas to Argentina at 98 US cents per million BTUS under a six-month contract. The sale price includes a 2-cent rebate to compensate for Argentine "solidarity", but it also includes clauses conditioned to the results of a very sensitive energy referendum scheduled in Bolivia next July 18.

Although there is no specific mention, the contract includes two clauses ensuring Bolivian gas exports to Argentina will not end up in Chile, a country with which it has no diplomatic relations because of the ongoing territorial dispute.

In the agreement the Kirchner administration pledges "to monitor" that the Bolivian gas will effectively be supplied to Argentina's domestic market. Chile originally received a daily supply of 19 million cubic meters of Argentine gas ? 90% percent of its total demand for this type of fuel--, and essential for electricity generation but now must live with almost a 20% reduction. Chilean authorities have complained bitterly about the unilateral decision of the Kirchner administration which "has eroded" confidence in bilateral relations.