MercoPress. South Atlantic News Agency

Natural gas sources diversification

Chile announced the medium term diversification of its natural gas supplies and the creation of a consortium that will import the necessary volumes from different countries.

After assessing multiple options, "Chile will elaborate a project for the acquisition of gas from distant countries which are in a position to supply liquid natural gas, have it unloaded, converted back into gas and pump it into the current network of pipelines the country has", said President Ricardo Lagos on revealing the project.

The project involves between 400 and 500 million US dollars that will have to be invested in a re-conversion plant for compressed gas transported from the different suppliers to Chile.

The government oil company ENAP will play a leading role in the project and has been instructed to create "a consortium of with the main natural gas consumers, (electricity generating plants and distributors) so as to complete a substantial demand to make the overall project profitable", added President Lagos.

ENAP itself will be in need of a million and a half cubic metres of natural gas daily in 2007.

An international bid will be convened with the purpose of having the plant ready and working by 2007, when "we will be able to say we have an independent and stronger energy matrix".

As to the current uncertain situation following Argentina's decision to limit the supply of surplus natural gas to Chile, President Lagos said "we've ensured we won't have any difficulties from now until 2008 given the significant public and private investments in several electricity generating plants in the country".

Mr. Lagos explained that the interconnected Chilean grid each year needs an additional supply of 400 megawatts to keep pace with the growing economy.

"In 2004, with the projects scheduled to be finished this year, we'll be adding 886 Megawatts, ensuring our needs for 2005 and 2006". Additional construction of electricity generating plants "means that in 2007 we will receive another 605 Megawatts", concluded President Lagos.

Currently, virtually 90% of all Chilean electricity natural gas generating plants depend on Argentine natural gas.

In related news the group of companies making up ENAP revealed that in the first quarter of 2004 the group managed a consolidated profit equivalent to 21 million US dollars, considerably less that a year ago. This was explained basically because of the exceptional profit margins in 2003 as a consequence of the Iraq conflict and a far stronger Chilean currency against the US dollar than in this year's first quarter.

However ENAP's liabilities in Chilean pesos dropped 11% compared to the first quarter of 2003, and the company has a strong international standing. In the second half of 2003. ENAP managed two syndicated international loans and last March 2004 floated 150 million US dollars in bonds in the US market. The ten year bonds were rapidly sold and the interest rate was 4,875%.