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Argentina clears first private gas swap with Chile

22 Dec 2017 20:06 GMT
Argentina clears first private gas swap with Chile

Buenos Aires, 22 December (Argus) — Argentina has authorized the first-ever private-sector natural gas swap with neighboring Chile.

France's Engie was cleared to export pipeline gas to its Chilean affiliate on the condition that it imports an equivalent amount of back into the country.

Engie unit Energy Consulting Services has permission to export a maximum 2.5mn m3/d of gas to Engie Energia Chile at 9,300kcal/m3 until 15 May 2018 or a maximum of 30mn m3, whichever comes first.

"The provision foreseen in the present authorization can be interrupted with the goal of guaranteeing domestic supply," notes the resolution published in Argentina's Official Bulletin today.

Under the agreement, Energy Consulting Services must then reimport the same amount of gas it sends to Chile within 240 days of delivery.

If the firm fails to fulfill its commitment, it will have to compensate the state for the cost of importing gas, plus a 50pc markup.

Argentina had been Chile's main source of gas from the late 1990s to 2004, when it started restricting exports amid soaring demand and plunging domestic production. The legacy of gas exports left a series of cross-border pipelines that have been mostly empty for the past decade.

Both countries now import LNG and Argentina also buys pipeline gas from Bolivia. Over the past two southern hemisphere winters, Chile exported regasified LNG to Argentina, after two of the pipelines were retrofitted for bidirectional flow.

In October, Argentina gave a green light to export gas to Chile during emergencies, laying the groundwork for gas swaps along their long shared border.