MercoPress. South Atlantic News Agency

Argentina doubles export tax on gas pumped to Chile

The Chilean government admitted on Monday it was “foreseeable” that Argentina would impose a 100% increase on the natural gas export tax. The tax on Argentine gas exported to Chile has soared from 7.8 US dollars per million BTU to 15.9 US dollars, which added to transport and other inputs adds to 29 US dollars per million BTU.

Chile's Energy minister Marcelo Tokman said that the tax is linked to the cost at which "Argentina is importing natural gas", which therefore "is no surprise". "We know that for some weeks now Argentina has been importing gas through its LNG re-gasification plant in Bahia Blanca", said Tokman who added that Argentine costs are far higher "than those associated to gas exports from Bolivia, so it's no surprise". Apparently the gas increase is retroactive to the second week of June to cover for the higher costs of the Bahia Blanca re-gasification plant which has been functioning from the end of May. A re-gasification vessel "Excelsior" is currently in Bahía Blanca pumping LNG to on shore deposits. This gas is far dearer than that supplied under contract by Bolivia which is the reason for the higher tax on exports to Chile. Landlocked Bolivia which has an on-going dispute over an outlet to the Pacific refuses to sell natural gas to Chile until the dispute is solved. But since Bolivia is a main supplier of Brazil and Argentina and Argentina is Chile's virtually sole supplier, most probably Santiago residents have central heating fuelled with Bolivian gas. An additional problem is that since Bolivia nationalized its oil and gas industry a couple of years ago, investments have lagged and it can't comply with the growing demands from Brazil and Argentina. Therefore Argentina has been forced to import additional LNG from other markets overseas, which is more expensive than having it sent from Bolivia.