\t\t\t\t\t \t\t\t\t\t \t\t\t\t\t Chilean Energy Minister Ximena Rinc\u00f3n visited the Vaca Muerta field in Neuqu\u00e9n province a few weeks ago and invited Argentina to use their ports on the coast of the Pacific Ocean to export oil and gas to Asian markets.<\/p>\n
A communiqu\u00e9 from Chile\u2019s foreign ministry offered more details on the proposal.\u00a0<\/p>\n
\u201cChile can serve as a close, stable, and complementary regional market for Vaca Muerta\u2019s energy production, offering port infrastructure, LNG [liquefied natural gas] terminals, regulatory expertise, logistical capabilities, and a strategic geographic location for exploring, in the long term, potential routes to Pacific markets,\u201d the text explained.<\/p>\n
The reasons behind the offer are clear, as Chile imports nearly all of its hydrocarbons. This leaves them exposed to price volatility due to the war in the Middle East.<\/p>\n
Santiago has already been relying on its neighbor\u2019s reserves. In 2025, 20% of energy imports came from Argentina, equivalent to US$2.8 trillion. This made Argentina Chile\u2019s second-largest energy supplier, behind the United States.<\/p>\n
The ambitious plan, however, runs up against a problem endemic to Argentina: government bureaucracy and the country\u2019s poor track record as an energy exporter.\u00a0<\/p>\n
Energy integration and Argentina\u2019s track record Daniel Dreizzen, director of energy consulting firm Aleph Energy, told the Herald that exporting via the Pacific would be a giant step forward for Argentina, given that Latin America is \u201ccompletely fragmented in terms of energy.\u201d\u00a0<\/p>\n
There are two specific reasons, however, why this would be difficult to achieve.\u00a0<\/p>\n
\u201cThe first is that Argentina will always want to carry out [these projects] on their side, both from a political standpoint and in terms of what it means for development,\u201d he argued.<\/p>\n
There are currently two LNG export projects under development along the Atlantic coast in R\u00edo Negro province.\u00a0<\/p>\n
The first is Argentina LNG, led by state-run oil company YPF, along with Italy\u2019s Eni and Abu Dhabi\u2019s Adnoc. The other is being driven by Southern Energy (SESA), a consortium comprising PAE, YPF, Pampa Energ\u00eda, and Harbour Energy.\u00a0<\/p>\n
The other reason cited by Dreizzen is that it would also pose a risk for Chile because it would have to rely on a project in another country. He cited a precedent from 19 years ago, when Argentina abruptly cut off gas supply to its neighbor.\u00a0<\/p>\n
A cold snap caused demand to spike in Argentina, which was unable to meet its commitments to its neighbor \u2014 due to declining local production. This led the country to prioritize its domestic market and abruptly cut off the supply.<\/p>\n
\u201c[Chile] had to import liquefied natural gas to generate electricity domestically, which was extremely expensive, and had to bring in regasification plants that it still uses today,\u201d Dreizzen explained.<\/p>\n
Relations between Argentina and Chile, however, are improving, he added, and there are \u201cmany points in common.\u201d<\/p>\n
Three weeks ago, Neuqu\u00e9n and the Biob\u00edo Region in Chile took a new step toward energy and trade integration by signing a series of agreements aimed at boosting oil and gas exports.<\/p>\n
During that meeting, the parties agreed to create the Neuqu\u00e9n\u2013Biob\u00edo Roundtable for Energy Cooperation and Integration to promote projects related to hydrocarbon transportation and the complementary supply of natural gas and electricity.<\/p>\n
The required infrastructure Dreizzen stated that the most difficult issues are the weather conditions at Chilean ports, such as rising sea levels and frequent heavy swells.<\/p>\n
\u201cThey need to improve drainage so that larger ships can enter and the weather has less of an impact,\u201d he said, adding that the Trasandino Oil Pipeline connecting Neuqu\u00e9n with the Biob\u00edo region would also need to be upgraded.\u00a0<\/p>\n
Daniel Gerold, founder of G&G Energy Consultants, told the Herald that the gas pipeline running from Neuqu\u00e9n to central and northern Argentina \u2014 where it would later connect with the outskirts of Santiago, Chile \u2014 would need to be expanded.\u00a0\u00a0<\/p>\n
Infrastructure work would also be needed in Chile. He mentioned the Quintero LNG import terminal, a port near Valpara\u00edso, which houses the LNG receiving facility operated by companies in Chile.<\/p>\n
According to Gerold, investments are required to liquefy the gas that will arrive via the pipeline from Argentina and convert it into LNG for export.<\/p>\n
He also emphasized that, despite the history of tension between the two countries over gas supply disruptions, there is currently \u201ca favorable environment for all these initiatives to thrive.\u201d<\/p>\n
The bureaucratic challenge Even if those obstacles are overcome, there would still be issues to resolve, according to the center-left think tank Argentine Center for Political Economy (in Spanish, CEPA).\u00a0<\/p>\n
\u201cThe risk is that the ambition to reach Asia will run aground on government bureaucracy,\u201d they warned.\u00a0<\/p>\n
In one of its latest reports, the think tank argued that the success of such initiatives \u201cdepends entirely on resolving a complex web of bureaucratic, idiosyncratic, tax, and customs-related friction that currently acts as invisible yet effective barriers.\u201d<\/p>\n
CEPA economists stated that exporting through other countries requires an \u201cinternational transit\u201d framework that currently \u201clacks the necessary flexibility.\u201d\u00a0<\/p>\n
\u201cDetermining who collects what, how royalties are calculated in an indirect export scheme, and which tax exemptions apply to avoid double taxation are questions that, if not resolved through clear bilateral treaties, will turn logistical efficiency into an unaffordable cost,\u201d they argued.<\/p>\n
Customs authorities in both countries, they explained, \u201cmust coordinate protocols that allow for absolute product traceability without causing delays that erode profit margins.\u201d<\/p>\n
\u201cUltimately, the development of this export channel is a test of maturity for regional integration.\u201d<\/p>\n
Cover photo credit: Rita Willaert<\/p>\n","protected":false},"excerpt":{"rendered":"
Chilean Energy Minister Ximena Rinc\u00f3n visited the Vaca Muerta field in Neuqu\u00e9n province a few weeks ago and invited Argentina to use their ports on the coast of the Pacific Ocean to export oil and gas to Asian markets. A communiqu\u00e9 from Chile\u2019s foreign ministry offered more details on the proposal.\u00a0 \u201cChile can serve as […]<\/p>\n","protected":false},"author":261,"featured_media":88761,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[739,42,673,4730,2511],"tags":[3484,96,1475,4728,3375],"class_list":["post-88760","post","type-post","status-publish","format-standard","has-post-thumbnail","category-chile","category-economics","category-energy","category-lng-in-argentina","category-vaca-muerta","tag-chile","tag-economics","tag-energy","tag-lng-in-argentina","tag-vaca-muerta"],"_links":{"self":[{"href":"https:\/\/service.codeus.ca\/index.php\/wp-json\/wp\/v2\/posts\/88760","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/service.codeus.ca\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/service.codeus.ca\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/service.codeus.ca\/index.php\/wp-json\/wp\/v2\/users\/261"}],"replies":[{"embeddable":true,"href":"https:\/\/service.codeus.ca\/index.php\/wp-json\/wp\/v2\/comments?post=88760"}],"version-history":[{"count":0,"href":"https:\/\/service.codeus.ca\/index.php\/wp-json\/wp\/v2\/posts\/88760\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/service.codeus.ca\/index.php\/wp-json\/wp\/v2\/media\/88761"}],"wp:attachment":[{"href":"https:\/\/service.codeus.ca\/index.php\/wp-json\/wp\/v2\/media?parent=88760"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/service.codeus.ca\/index.php\/wp-json\/wp\/v2\/categories?post=88760"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/service.codeus.ca\/index.php\/wp-json\/wp\/v2\/tags?post=88760"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}