MercoPress. South Atlantic News Agency

Chile to face rise in gas; Chile works on reducing gas dependency

Once again gas is a big issue in Chile

Despite promises last year that gas prices would remain stable in coming months, gas supply company Energas announced Tuesday that prices are to increase by an average of 2.7 percent.

Energas director Cristián Larrondo said the company would be increasing gas prices for its 35,000 clients and reminded clients that the last increase in gas prices occurred nearly two years ago, in April 2005. He said gas prices would continue to be competitively priced compared to other combustibles such as liquid petroleum gas (LPG). The company said last July that increased gas costs in Argentina (due to increased taxes) would not affect the prices paid by its clients. Larrondo said at the time that there were "no plans to change prices." It is rumored among industry executives that similar steps will be taken by other important gas supply firms, including Metrogas, the biggest gas supplier in Chile. Gasco, which controls Metrogas, said last month that prices could not remain stable indefinitely. "That was a promise that was made temporarily, while things were still being clarified," said a company spokesman. "At no point did the Metrogas administration say that the prices would never change." Metrogas has already increased rates for its industrial and business clients; industrial gas costs went up by 30 percent in August, and commercial clients had to pay 12 percent more after November. Over the last few years, the prices that suppliers pay energy producers have gone up substantially. Despite this increase, critics say that Chilean authorities are not doing enough to encourage investments in new energy sources. Argentina currently provides Chile with 100 percent of its natural gas imports. Chile needs 22 million cubic meters of gas each day, of which 9.5 million go directly to the central zone. The biggest consumers are the electric, industrial and trade areas in Regions V and the Metropolitan Region. Chile works on on reducing gas dependency

Chile's state-owned copper company Codelco is leading a team of mining and gas companies working towards freeing Chile of its energy dependency by producing liquid natural gas (LNG) in northern Chile. Codelco announced Tuesday a "fast track" plan for the project which will enable the new plant to supply the northern power grid with natural gas by 2008, rather than 2010. When finished, the project will include a large underground storage-tank for the LNG. The team unites the "G-4" mining companies - Codelco, Phelps Dodge, BHP Billiton and Doña Ines de Collahuasi â€" which will control 75 percent of the project, with Swiss energy company Suez y Gas Atacama, which will control the remaining 25 percent. Energy-hungry Chile is currently dependent on Argentine gas imports. Greater domestic demand for natural gas in Argentina has recently resulted in interruptions in supply and higher prices for Chilean consumers. There is sporadic talk of exchanging sea access for natural gas with Bolivia. The Santiago Times - News about Chile