Chile will be providing its energy-short neighbor, Argentina, with 5.5 million cubic feet of natural gas a day. The agreement, which begins in May, the beginning of the South American winter, will also provide 200 megawatts of electricity.
The agreement, was signed by Argentine Energy Minister Juan Jose Araguren and his Chilean counterpart, Maximo Pacheco. The imports will represent 20 percent of Argentina’s gas imports Pacheco told Chile’s La Tercera newspaper.
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Gas exports that Chile receives from Southeast Asia in GNL terminals located in Mejillones and Quintero will sent to the industrial and residential areas of Buenos Aires. The existing pipelines, NorAndino, and GasAndes will be used for gas delivery. An existing power line which runs from Mejillones in Chile to the Argentine state of Salta will provide electricity delivery
“A new era starts in the energy alliance between Chile and Argentina,” Pacheco said. The Magallanes agreement is expected to bring in 180 million dollars yearly for Chile.
After his surprise victory in the November 22 Presidential runoff, Argentina’s Mauricio Macri said he was seeking to build new Pacific trade links in energy delivery. He especially sought improved relations with neighboring Chile.
Just twenty years ago, Chile became entirely dependent on Argentine natural gas which at the time had become a formidable producer.
The NorAndino and GasAndes pipelines were at first used to ship gas from Argentina to Chile.
Under twelve years of former President Cristina Kirchner, a Peronist, Argentina turned its attention to domestic consumption at bottom-of-the-barrel prices and froze all industry investments. In just three years, Argentina went from being a net exporter of natural gas to being a net importer.