MercoPress. South Atlantic News Agency

Chile on track to diminish Argentine gas dependence

Chilean president Michelle Bachelet inaugurated Tuesday the construction of a re-gasification plant that officials say will reduce the country's high dependence on (Argentine) imported natural gas.

"As our economy expands we will need more and more energy and this plant is an answer to a major challenge our country faces", said the Chilean president during the breaking ground ceremony at Quinteros, 230 kilometres north of Santiago.

"Chile is growing and this is very good news but that good news needs of policies that ensure our energy autonomy, so that we don't have to depend on other countries.This plant will guarantee an appropriate energy supply".

Chile currently imports 97% of the 22 million cubic meters of natural gas it uses daily, at a cost of more than 800 million US dollars a year with most imports coming from Argentina, which in the last two winters reduced or cut supplies temporarily because of technical problems and increased domestic consumption.

The re-gasification plant initiative was launched two years ago by former president Ricardo Lagos and is expected to come online beginning in mid-2008 at an estimated cost of 400 million US dollars. The Quinteros plant which will convert imported liquid gas into natural gas should be fully operational sometime in 2009. Among potential providers are Indonesia, Russia and Trinidad Tobago.

The liquid gas plant is being jointly built by Chile's government owned oil company Enap, Endesa Chile and Metrogras linked to British Gas.

"Quinteros will not be a support plant for when other conventional systems fail; it will convert Chile's energy grid into a reliable, stable and permanent source", said Enrique Davila Enap's CEO.

The re-gasification plant will supply electricity generating plants, industrial boilers, commerce and residential demand. The project also involves the construction of a 1.300 metres long pier, liquid gas unloading equipment, two deposits with a storage capacity of 160.000 cubic metres each and the gasification boiler.

Earlier in the day Energy Minister Karen Poniachik announced the reduction of gas supply to Santiago's industrial belt following Argentina's announcement it would proceed to maintenance and repairs in the main gas pipelines.

"The idea of the re-gasification plant is precisely to avoid these kind of problems", said Minister Poniachik.

However the minister said Chile would go ahead with regional integration plans for a continental grid linking suppliers such as Venezuela, with main consuming countries.

Besides, "we're working on an energy security plan which contemplates diversifying our energy source with greater autonomy from international prices so that oil and coal don't have such incidence on our domestic costs", added Ms Poniachik.