Argentine gas deliveries to Chile climbed steadily in 2022

Argentine shale gas is playing an increasingly important role in the Chilean energy mix, and authorities are working to smooth out potential regulatory wrinkles.

Through new measures like the implementation of longer contracts and a supply tender, on which the two nations have worked closely together over the past few years, Argentine gas is again flowing steadily across the Andes. 

Sector trade groups are also looking to tighten up cross-border standards and regulations to account for the new characteristics of shale gas, which has different characteristics to the conventional gas Chilean companies are used to receiving from Argentine producers.

Chilean natural gas trade group AGN and Argentine hydrocarbons institute IAGP recently commissioned a study to this effect, which was presented on Wednesday. The study proposed new limits on the Argentine regulatory authorities to enable the supplied gas to comply with Chilean standards.

The role of Argentine gas in Chile has grown steadily over the past three years and accounted for roughly 50% of the natural gas imported into Chile in 2022, AGN executive president Carlos Cortés told the senate on Monday.

"There is great news regarding the renewed integration with Argentina since 2018," when presidents Sebastián Piñera and Mauricio Macri authorized pipeline deliveries to resume, given Argentina's growing surplus from the Vaca Muerta shale formation. The Argentine gas crisis of 2004 made supply highly unstable until 2009, when it was cut definitively.

"Gas deliveries have risen and the commitments have been fulfilled, and we believe it is great news for the natural gas system, because, as we all know, international geopolitical circumstances are affecting the logistics of commodities, including LNG," Cortés said.

In mid-2022, current presidents Gabriel Boric and Alberto Fernández signed a deal to increase energy integration, which included a commitment to pipe 300,000m3/d to Chile at least until September of 2023. The authorities said they wanted to eventually reach capacity to send 4Mm3/d year-round.

Pipeline supply has usually been curtailed by Argentina in the southern hemisphere winter months of June-August, when its gas surplus turns into a shortage due to higher winter consumption. This has prevented companies from signing year-round contracts in previous years.