Chile and Argentina are advancing in talks to agree on reciprocal exchanges of electricity and natural gas between the two countries, Chilean Energy Minister Andres Rebolledo said Thursday.
Speaking to correspondents in Santiago, the minister said he will present Argentine counterpart Juan Jose Aranguren next week with a draft proposal for regulations allowing such swaps.
“It would be very interesting to have a model that would allow you to sell electrons or molecules of electricity or gas at one point and import them at another,” Rebolledo said.
A decade ago, Chile was a major importer of natural gas from its neighbor, but flows along the pipelines were reversed last year as Argentina struggles with a lack of capacity in its energy infrastructure.
Between May and August last year, Chile exported 361 million cu m of natural gas to Argentina, which had been imported as LNG from Trinidad and Tobago and the US.
State energy firm ENAP is currently in talks with its Argentine counterpart ENARSA to repeat the exports this year.
Chile also exported 101 GWh of electricity to its neighbor along an existing line to northwest Argentina.
But greater synergies could be gained by balancing imports and exports at different points along the border.
“This is super attractive as our country breaks up in the south we are not physically integrated,” Rebolledo said.
ENAP has discovered significant reserves of unconventional gas in Chile’s southernmost Magallanes region, which is much closer to Argentina’s Patagonia than the Chilean capital Santiago, 2,000 km to the north.
Argentina could export gas from its Neuquen field to southern Chile via the Gas del Pacifico pipeline as it lacks sufficient internal domestic capacity to move that gas to Buenos Aires.
Chile is also keen on developing an interconnection between its northernmost city Arica and the Peruvian city of Tacna, 50 km away. The line would also allow Chile to export excess solar power to its neighbor during the day, receiving electricity generated from Peruvian natural gas at night.
Broader energy integration across the region would require the development of a lateral regulatory framework. But Rebolledo said recent economic and political developments made it a favorable time for such a deal.
Argentina, Brazil and Peru have also gained new pro-business presidents since the end of 2015.