Argentina will begin exporting natural gas to Chile before the end of the year, the energy ministers of both countries said on Thursday (14.6.2018), as production from the Vaca Muerta unconventional field increases.
Both nations had previously signed agreements allowing the export of gas or electricity in emergency situations but requiring an equivalent amount to be reimported within 12 months.
Mutual benefit
Chilean companies are in talks to sign import contracts and the first shipment of gas across the Andes mountain range could occur in October or November this year, Chile's Energy Minister Susana Jimenez said.
“We see there a great opportunity “mutually beneficial,” the official said during a G20 Energy Ministers Meeting in Bariloche. Jiménez added that the gas could come from both the Neuquina basin, home of Vaca Muerta, and the Austral basin in southern Argentina.
Less contamination
The gas could be used to generate electricity, replace imports from other sources or to heat homes in areas where families still rely on firewood, a source of pollution in the central-south region, the minister explained. Chile produces few hydrocarbons of its own.
Unrestricted exports would mark a turning point in energy trade in the region. Argentina was once a major supplier of natural gas to Chile but triggered a diplomatic crisis in the mid-2000s by cutting off shipments when its own supplies ran out.
Argentina, first in reserves
Argentina ranks first in world reserves of shale gas, but it remains a net importer of energy. Since taking office in December 2015, President Mauricio Macri has sought to relax labor rules and increase infrastructure to attract investment.
The increase in production of Vaca Muerta could help the country export more of what matters by 2021, said Argentina's Energy Minister Juan José Aranguren.
Dead cow
Vaca Muerta is the main shale formation (sedimentary rock containing gas and oil) of the country, located in the Neuquén basin in the provinces of Neuquén, Río Negro, La Pampa and Mendoza.
Source: Reuters
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