MercoPress. South Atlantic News Agency

Australia potential LNG supplier of Chile

Chile is seriously considering Australia as a natural gas supplier for the country's plan to build the first liquid gas port in South America aimed at cutting its dependence on Argentine gas, said President Ricardo Lagos currently visiting Oceania.

Last month Chile opened an international bid for the provision of a Liquid Gas terminal with a daily capacity of eight million cubic metres, at an estimated cost of 300 million US dollars.

"Considering our energy requirements you in Australia have abundant natural gas and we would like Chile to share it with you", said President Lagos during a press conference sitting next to Australian Prime Minister John Howard in Canberra.

Chile is almost totally dependent on Argentine natural gas for electricity generation and the domestic market but since Argentina under President Nestor Kirchner privileged the home market, the supply has become unreliable.

"Australia will encourage the sale of its liquefied natural gas to Chile to help the country's energy needs", confirmed PM Howard, adding that "we've talked about it and we are on the lookout for new markets; given the strong association that's already there, we would be very happy to see that occur".

Australia's LNG exports are expected to reach 12 million metric tons this year, from 9 million in 2004, and capacity may reach 50 million early next decade is all proposed projects go ahead.

Australian Industry Minister Ian Macfarlane said last month he would be travelling to Chile to look at opportunities for Australian LNG exports.

Chile's government owned oil and gas company ENAP said it was considering as potential suppliers Russia, Australia, Oman, Peru, Nigeria, Malaysia and Indonesia.

Australia currently has one LNG producing project, Woodside Petroleum Ltd., in the north west shelf. However Conoco Phillips is scheduled to start up an LNG plant in northern Australia early 2006, and Chevron has announced it could be approving next year an LNG project in western Australia involving six billion US dollars and which could be in full production by 2010.

Australia and Chile also discussed the possibility of closer cooperation in nuclear energy research, according to an official statement.