MercoPress. South Atlantic News Agency

Chile's efforts to reduce Argentine gas dependence.

ENAP, Chile's government owned oil company and which is leading a project to put an end to Chile's dependence on Argentine natural gas supplies, has already selected a location for constructing the plant that will re-gasify imported liquefied natural gas. The new plant will be located in Quintero, north of Valparaiso in central Chile's Region V.

The plant is part of a plan announced by President Ricardo Lagos last month to import and process liquefied natural gas in Chile. The overall project will require an estimated investment of 400 to 500 million US dollars, including an international tender for gas producers, the construction of a special port and a plant in Chile to re-gasify the fuel, which would then be pumped into Chile's existing natural gas network.

ENAP will soon launch an international bidding process to establish which company will be in charge of exporting liquefied natural gas to Chile, and which will construct the plant and terminal on Chile's coast.

The bidding process will be carried out by an investment bank that will be decided upon next June. ENAP is already in contact with several investment banks and at least six of them are interested in participating in the bidding process.

Several international companies have expressed their interest in taking part in the project, the most recent being Gazprom from Russia, the world's largest gas producer. ENAP also reported that two of the largest natural gas companies in the United States and Europe have contacted the Chilean state-owned company expressing their interest and asking for details on the project.

The plant should be operating by mid 2007. The administration is betting on this new project to solve Chile's future energy needs a much needed move in light of the current energy shortfall created by Argentina's decision to cut back on natural gas exports to Chile.