Latin America Advisor
Energy Advisor
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Will Chile Be Able to Import More Gas From Argentina?
Argentina will boost shipments of oil and natural gas to Chile as part of a bilateral agreement made between the two neighboring countries on April 4. A natural gas pipeline in Argentina’s Neuquén basin is pictured. // File Photo: Argentine Government.
A Chilean delegation led by President Gabriel Boric met with Argentine President Alberto Fernández and other top officials on April 4 in Buenos Aires to discuss closer energy cooperation. The neighboring countries signed an agreement for new collaboration in energy, including increasing Argentine exports of liquefied natural gas and oil to Chile, and the reopening of the Neuquén-Biobío pipeline. What are the most important areas for energy cooperation between the two countries, and how much does the latest accord achieve toward advancing them? How critical is the rehabilitation of the Argentina-Chile natural gas pipeline, and how much investment will that project take? How will increased energy trade affect high fuel prices in Chile and Argentina? Will importing more fossil fuels into Chile complicate Boric’s renewable energy transition agenda?
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Ezequiel Fernández, research director at Balanz: “The focus of the energy talks between Boric and Fernández seemingly revolved around the usual desire for potential increases in Argentine hydrocarbon exports to Chile. Sending Vaca Muerta gas over the Andes is already helping Argentina with hard currency needs, while Chile benefits from sourcing cheaper-than-LNG fuel. More abundant and consistent gas flows between the two countries would be great, but the truth is that Argentina is already exporting as much gas to Chile as it can. A significant expansion beyond the 6,000-cubic-meters-per-day summertime volumes would require expanding interconnecting pipes, sizable midstream upgrades in Argentina (some on the way), the expiration of existing LNG contracts in Chile and much faith in the sanctity of new bilateral contracts. This looks like too much for Argentina to pull off, and Chilean off-takers have not…”
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A sister publication of the Inter-American Dialogue’s daily Latin America Advisor, the weekly Energy Advisor captures fresh analysis from business leaders and government officials on the most important developments in oil and gas, biofuels, the power sector, renewables, new technologies, and the policy debates shaping the future of energy in the Western Hemisphere and beyond. To subscribe or for more information, contact Erik Brand, publisher of the Advisor, at ebrand@thedialogue.org.
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