MercoPress. South Atlantic News Agency

Argentina/Chile to discuss natural gas supply

Energy officials from Argentina will travel to Santiago this month to discuss the supply of natural gas to Chile. Argentina's energy secretary, Daniel Cameron, will meet with Chile's mining minister, Karen Poniachik, and the executive secretary of the Chilean National Energy Commission (CNE).

Experts from the Chilean energy sector agree that the location of the visit is significant. Until now, all energy meetings have taken place in Argentina ? including President Michelle Bachelet's visit two weeks ago. For a high ranking energy official from Argentina to visit Chile is a powerful sign of cooperation between the Kirchner and Bachelet administrations.

When Bachelet visited Argentina two weeks ago, Chancellor Alexander Foxley expressed the trepidation of the Chilean government about the future supplies of Argentine gas. Foxley described Chile's energy situation as "difficult," and said that "it would be absurd to deny that to Chileans. This year is going to be more complicated than the previous one."

During Bachelet's visit, the two countries agreed to reconvene within 60 days to discuss more concrete measures and look for solutions to Chile's power crisis. One of the key issues that will be discussed in the meetings is the export of Argentine gas to Chilean companies. Eighty percent of the arrangements currently in place expire in the next 10 years, and it is anticipated that they will not be renewed.

Finding a reliable source for energy is a priority for the Bachelet government. Over the last decade, Chile has become increasingly dependent on foreign energy suppliers.

Twenty-five years ago, the country imported 30% of the energy it consumed; today this figure is 60% and in 2009 it will reach 70%.

Argentina's natural gas alone accounts for 37% of Chile's energy needs. However, when faced with an energy shortfall of its own in 2004, Argentina unilaterally reduced gas exports to Chile, wreaking havoc on Chile's economy.

Geoff Burt - The Santiago Times - News about Chile