MercoPress. South Atlantic News Agency

Large deposits of natural gas in Chilean Tierra del Fuego

Chilean president Ricardo Lagos confirmed Thursday that the government owned petroleum company ENAP, had discovered natural in Magallanes Region, more precisely in the Mercedes Lake, Tierra del Fuego.

"I believe we're going to hear very good news from the south of the country, Magallanes Region, which is not only important for domestic consumption but also for the Methanex plant of methanol next to Punta Arenas", said President Lagos.

The discovery comes in the framework of the 2006 ENAP exploration program which has earmarked 300 million US dollars with its main objective finding natural gas in Lake Mercedes.

President Lagos also anticipated that probably next year "Chile will be receiving some very good news from the south of Chile regarding coal".

Lake Mercedes is 150 kilometres south of Porvernir, Tierra del Fuego and primary estimates project a natural gas deposit potential equivalent to 25% of current Chilean consumption.

Apparently three potential reserves have been detected at an estimated depth of 4.000 metres, and drilling began this week by the private contractor Helmerich & Payne International Drilling Co.

This exploration stage is expected to absorb 12 of the 52 million US dollars that ENAP plans to invest in the program Lake Mercedes 2.

The main beneficiary of the project if the discovery proves commercially viable will undoubtedly be the Methanex plan which has even offered to help financially in developing natural gas resources in Magallanes, said ENAP officials.

The offer was made last July 2005 by Methanex president Bruce Aitken who insisted that Chilean natural gas would be vital to overcome the uncertainty caused by the successive restrictions imposed by Argentina, the main supplier of the plant.

Methanex in Punta Arenas produces 12% of the world's methanol and is the company which has most been battered by the erratic provision of natural gas.