MercoPress. South Atlantic News Agency

Bachelet confirms natural gas deposit in Tierra del Fuego

Chilean president Michelle Bachelet confirmed Tuesday in Santiago the existence of natural gas in Lake Mercedes, Tierra del Fuego. A vital resource for energy short Chile and the huge methanol complex in Punta Arenas.

"There's natural gas, the next step is to confirm commercial volumes", said Ms Bachelet in a press conference next to Mining Minister Karen Poniachik and Chile's government oil company ENAP CEO Enrique Davila who added that it was decided to continue with the second exploratory stage to assess the commercial value of the discovery.

"We're very satisfied with what ENAP is doing and has achieved", said Ms Bachelet who revealed that the drilling had reached 4.300 metres.

"If the gas deposit proves successful the whole Region of Magallanes will have an ample supply of energy until 2020 and we could even consider the possibility of supplying natural gas to the rest of the country", emphasized the Chilean president.

She added that a first advance of the next stage could be available by mid May stressing that if production is above 125.000 cubic metres per day, "the volume is commercially viable and we could consider the possibility of supplying the rest of the country".

Energy dependent Chile desperately needs new sources and alternatives following Argentina's decision to privilege its own natural gas domestic market in spite of bilateral contracts dating back to the mid nineties. Actually Argentina supplies almost 90% of Chile's natural gas with a significant volume going to the generation of electricity.

Besides, next to Punta Arenas the Canadian consortium Methanex has one of the world's leading plants of methanol converted from natural gas, which is supplied from neighbouring deposits in Argentina. However in past winters the plant has also faced unexpected gas blackouts, although not as severe as in metropolitan Santiago.

Ms Bachelet further announced that next Friday she will be flying to Punta Arenas and Lake Mercedes to "personally see the job done by the ENAP people".

The geological assessment of Lake Mercedes began in 2003.