MercoPress. South Atlantic News Agency

Chile expects another difficult year for gas supply

Foreign Affairs Minister Alejandro Foxley struck a pessimistic this week regarding Argentine natural gas supplies to Chile: ”It is absurd to try to deny it to Chileans; this year (the gas issue) will be even more complicated than last”.

Foxley made the statement following President Michelle Bachelet's meeting with Argentine President Néstor Kirchner on Tuesday, where talk of the region's growing energy needs dominated the conversation.

Chile is strongly dependent on imported fuels and in 1995 struck a deal with Argentina to receive large amounts of natural gas. But rocketing internal demand led Buenos Aires to reduce gas shipments to Chile last year in violation of the 1995 energy protocol. Many Chilean industries were forced to use higher-price fuels, and concern mounted that there would not be sufficient energy to meet the nation's requirements.

While accompanying Bachelet to Argentina, Foxley acknowledged that meeting the nation's 2006 energy needs would be "difficult." "We must accelerate the diversification of the Chilean power matrix [. . .] the problem is serious," he said.

President Bachelet was evasive when asked about the issue after meeting with Kirchner. The Chilean president said some alternatives will be explored, such as potentially importing gas from a third country, creating and implementing other power sources, and renovating the network of gas pipelines in South America.

She added that the Chilean-Argentinean energy commission created in 2004 will be revived to continue work on researching alternatives. (ST).-