MercoPress. South Atlantic News Agency

Bachelet announces “energy autonomy” in next two years

Chile will become in the next two years energy “autonomous”, cutting its current Argentine dependency and cooling a “national security”, announced President Michelle Bachelet.

The plan includes several ambitious projects which will eliminate the vulnerability of the Chilean economy and put an end to virtually the only bargaining chips neighboring countries such as Argentina and Bolivia appeal to in dealings with Santiago.

"We've designed and are working on an energy policy which in two years will guarantee Chile's energy independence", said the Chilean president in a national broadcast on public television.

"For me energy is crucial and I'm working on the issue since my first day in office, because it's also a national security issue", she added.

Bachelet's announcements coincide with the third year running restrictions on natural gas provision from Argentina plus a price hike. When Chile signed natural gas supply contracts with Argentina eleven years ago, the military cautioned about the consequences of such a significant dependency for the country's national security.

Argentina is Chile's only supplier of natural gas and following an agreement with Bolivia to increase the price 56%, the Buenos Aires government decided to pass the additional bill onto its own export clients, mainly Chile. Argentine gas in Chile not only supplies homes but 47% of the country's electricity.

Chile's economy expands at an annual average of 6%, and energy consumption 7% and Chile estimates that by 2010 at current levels of production, Argentina won't have sufficient surplus to export and pump across the Andes.

The plan to cut Argentine dependency is based on a re-gasification plant of liquid gas being built by British Gas in a port city in the north of the country at a cost of 350 million US dollars. The plant should be operational by 2008 and together with other private initiatives and the development of gas deposits in Magallanes Region, in the extreme south, should help grant the country more autonomy.

Chile's government petroleum company ENAP plans to have built a gas pipeline in Magallanes in the next twelve months which will link with the existent network, thus ensuring energy in the extreme south of the country and abundant natural gas for the giant methanol plant in Punta Arenas.

In the north of Chile an affiliate from France's Suez Energy should have concluded by 2011 a plan to ensure energy autonomy basically with a thermal unit, a diesel deposits terminal in one of the ports and linking the system to the national electricity grid.

The overall investment is above 700 million US dollars and is crucial for the copper industry concentrated in the north of Chile.