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The Road From Argentine Natural Gas to LNG

Ricardo Peña, International Mining and Oil & Gas Law, Development and Investment (2009)

The construction of the LNG terminal in Quintero was not the only initiative espoused by the Chilean government to tackle the crisis triggered by the supply of Argentine gas. Through Corporación del Cobre de Chile S.A. -Codelco-, a second LNG project located in Mejillones (northern Chile) is already in full swing, mostly geared toward meeting the needs of the mining sector. This project was developed by Codelco together with multinational Suez and entails an investment in excess of US$400 million. It is slated to go on stream sometime during the second half of this year.

Likewise, Codelco is already at an advanced stage in a bid for a power supply agreement to meet the needs of its mining facilities in Chile's central valley, which combined total 800 MW. To this end, Codelco called an international bid for power supply, which calls for entering into a toll agreement to be in effect for 20 to 30 years. The aggregate investment is estimated at US$ 1.5 billion.

There are also several other private initiatives in the energy sector that will become operational in the medium term, all of which have taken advantage of a recently-created legal framework that encourages energy investments.

This has been the Chilean government's response to the serious problems that arose with the crisis in the supply of Argentine gas. In fact, over the past five years Chile ha