Cop 27: Chile ‘concerned’ over gas supply next winter

An improving global LNG supply chain could make it "even more challenging" for Chile to meet its energy needs next winter, as the competition for LNG supplies has increased because Europe seeks to replace Russian gas, according to Chile's energy minister Diego Pardow.

Speaking on the sidelines of the UN Cop 27 climate summit in Sharm el-Sheikh today, Pardow told Argus that Chile was "exposed" to increased competition for LNG supplies on the global market as the country relies heavily on imports for most of its gas consumption.

Equatorial Guinea and Trinidad and Tobago each accounted for around 32-35pc of Chile's LNG imports so far this year, with another 24pc coming from the US, according to Vortexa data. The US accounted for 72pc of Chile's LNG imports for the whole of last year, but now most of the US supply is going to Europe, with Russia cutting its pipeline supply to Europe by 80pc this year.

While LNG is still unable to fully replace Russian gas in Europe's supply mix, additional regasification capacity and a partial debottlenecking of the pipeline network has already allowed Europe to bolster LNG receipts this winter. And the continent is on track to increase its scope to absorb LNG further going into the next year, intensifying competition for the liquid fuel.

"We are of course concerned, and we are trying to work as hard as we can" to prevent any supply shortages or domestic price increases, Pardow said.

The Chilean minister noted that supply this year would be sufficient thanks to recent efforts to fill storage sites ahead of the winter and expects less countries to try and secure spot LNG supply because of it.

Chile already secured an additional 300,000m³/d of gas from Argentina in the summer, for delivery in June-September 2023.

By Florence Schmit