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Cross Border Disruptions of Natural Gas and Other Energy Sources in Chile and Argentina: Implications For Long Term Contracts and Mineral Projects

Andrés Alonso, Omar Beretta, Carlos Pérez-Cotapos, Mining and Oil and Gas Law, Development, and Investment - Book 1 (2007)

The increasing globalization of the economy in general brought along a rising interdependence between exporters and importers of energy. Announcements have been made of large-scale projects in South America that will create cross-border energy chains and capital flows. In this scenario, energy is viewed as a strategic resource within a national energy policy and governments have taken steps towards playing a strategic role. Energy integration appears to be a relevant aspect of a common national policy to strengthen the relationship between South American nations. By the same token, any changes to the domestic energy regulatory framework will have repercussions across the border.

The purpose of this paper is to focus on cross border disruptions of natural gas between Chile and Argentina its implications to both the mining and the oil/gas industries and how this issue is being addressed by the governments and by the private sector. A description of the legal rules related to cross border disruption is presented.

An exhaustive review of the Chilean and Argentine natural gas legal framework is not attempted. The legal implications of cross border disruptions for long-term contracts are addressed to draw conclusions to promote a favorable framework for regional integration. Issues specific to potential country or private party responsibility associated with disrupt