MercoPress. South Atlantic News Agency

ENAP looking for natural gas in Tierra del Fuego

ENAP, Chile's government owned Oil Company believes that there's enough natural gas in Tierra del Fuego to supply 25% of the country's demand, ensuring a reliable provision of gas to Magallanes Region main industry, Methanex.

Enrique Davila, ENAP's CEO said that seismic surveys confirm the existence of important deposits in Lake Mercedes, Tierra del Fuego, where an exploratory well will be drilled next September.

"We estimate a daily extraction of five million cubic metres, which is equivalent to 25% of Chile's current gas consumption and more than enough to ensure a steady flow to Methanex", which has been suffering because of its dependence on Argentina natural gas said Mr. Davila during a conference in Santiago.

Methanex, a Canadian company, is the world's major producer and supplier of methanol, and has one of its main plants a few miles away from Punta Arenas.

Chile's current daily consumption of natural gas is 22 million cubic metres although the supply is quiet erratic because Argentina, which provides 90% of the country's demand, privileges domestic consumption over exports.

"If proven reserves are above five trillion cubic metres we could end with supply uncertainties to south and mid Chile", added Mr. Davila.

Six areas in Tierra del Fuego have been marked for further exploration, and this weekend ENAP awarded two contracts for seismic surveys in San Gregorio and Laguna Blanca.

The exploratory well to be drilled next September, a mile and a half from a previous (1991) well, will demand an investment of 13 million US dollars.

"Tierra del Fuego is a gas basin, that is why we're going ahead and investing in the area", concluded Mr. Davila.