MercoPress. South Atlantic News Agency

Chilean gov't says natural gas shortage a “sensitive issue”

Chilean Chancellor Soledad Alvear said on Saturday that the supply problem caused by Argentine restrictions on gas exports to Chile is becoming “a sensitive issue provoking a great deal of concern”.

During a Buenos Aires press conference, Alvear said that the shortages "directly affect Chilean citizens" because the substitution of fuels means "extra costs" in taxes.

The chancellor on Saturday met with the Argentine ministers of Foreign Relations, Rafael Bielsa, and of Federal Planning, Public Investment and Services, Julio de Vido, in which they resolved to form a work group with representatives from both countries "to find a way to overcome this difficult situation". Later at the Chilean embassy, Alvear said that during the meeting of ministers "the possibility of strengthening investments in the Argentine province of Neuquen" would be studied, since it would constitute "a first step in finding a solution" to the shortages afflicting Chile.

Argentine-Chilean relations are going through a bad moment due to the Kirchner government's decision to cut the flow of gas to Chile by some 3.3 million cubic meters, in order to deal with the scarcity of the fuel in Argentina as the cold of autumn and winter sets in.

The bad feeling that this decision has caused in Chile has led to a number of formal protests, since 90 percent of gas consumed annually there comes from Argentina.

Aside from rationing gas to Chile, the Argentine government has had to buy gas from Bolivia and make agreements with Venezuela and Brazil to obtain fuel and electricity, in order to cover the nation's power needs.

Another sore point is that in the agreement signed between Argentina and Bolivia, the latter nation specifies that any gas sold to Argentina cannot be resold to Chile.

Alvear said that the Chilean government was "surprised" to learn of that article and sent "a diplomatic note" to Bolivia expressing its concern, while at the same time suspending all negotiations that it had maintained with that country.