Chilean Govt. Says Gas, Power Supplies Guaranteed

Chilean government officials say that there will be no cuts in domestic gas supplies or power rationing this winter, despite the possibility of gas supply interruptions from neighboring Argentina, local newspapers reported.

Chile's economy and energy minister Jorge Rodríguez and the director of Chile's national energy commission (CNE), Luis Sanchez Castellón, made the announcement after reviewing a report by Chile's central grid operator CDEC-SIC. "People should rest assured that electricity and domestic gas will continue, independently of whether there are gas supply problems in Argentina," Rodríguez said.

Of the main gas-fired thermoelectric generators in the central grid - Nueva Renca, San Isidro and Nehuenco - the first two are already prepared to burn diesel in the event of gas rationing and Nehuenco should be ready by end-April, El Mercurio reported.

Thermoelectric generators in Chile's northern SING grid also depend on Argentine gas supplies through the GasAtacama and NorAndino pipelines, but most of the combined cycle plants are prepared to burn diesel instead of gas if necessary, papers reported. Burning diesel instead of gas would be more expensive and prices for end consumers would rise slightly, but companies would have to absorb the higher costs initially because the next biannual price revision is not scheduled until October, Rodríguez said.

Meanwhile, Argentina's government has reassured Chilean authorities that gas supplies to Chile will not be interrupted this winter despite a resolution by the energy ministry last week to limit natural gas exports, local newspapers reported.

Resolution 265 suspended the export of surplus gas that could be used to meet domestic demand and calls for the drafting of a program to cut gas exports. Argentina currently has a deficit of about 5 million cubic meters a day of gas and gas-fired thermo generators are unable to keep up with demand, which has resulted in power cuts for large industries.

However, Argentina's Neuquen basin, which supplies the central part of Chile, is unlikely to ration gas exports because producers receive payment in dollars and would be giving up a large part of their income, Rodríguez said.

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