September 7, 2017 / 5:51 PM / 2 months ago

EXCLUSIVE-Chile expects to soon clinch Argentina energy swap deal

(Adds details on electricity and gas trade between nations, adds pictures, context)

By Felipe Iturrieta

VINA DEL MAR, Chile, Sept 7 (Reuters) - Chile expects to close an energy swap deal with Argentina in the days ahead, Chilean Energy Minister Andres Rebolledo said in an interview on Thursday, the latest example of increasing economic integration between the South American nations.

The neighboring countries are also negotiating the locations for five additional transmission line interconnection points, with an agreement expected as early as January, the minister told Reuters.

“We made a proposal to Argentina and we are very close to reaching an agreement,” Rebolledo said, referring to the energy swap.

“I think we can have an agreement in the next couple of days or if not, over the next few weeks,” he added.

Chile and Argentina share a 3,300-mile (5,300-kilometer) border running north to south along the rugged terrain of the Andes mountains. The deal would allow both countries to send natural gas or electricity at one point of the frontier and obtain needed supplies at another border point.

In 2016, Chile exported 100 gigawatt-hours of electricity to Argentina and 361 million cubic meters of gas, worth nearly $100 million.

The deal is the latest episode in a larger economic and diplomatic rapprochement between the neighboring South American countries that have often had frosty relations. Since conservative Argentine President Mauricio Macri came to power in 2015, the two nations have signed free trade deals and begun transporting gas between the nations, among several other measures.

Rebolledo, who spoke with Reuters on the sidelines of the Energy and Climate Partnership of the Americas (ECPA) meeting in the coastal city of Vina del Mar, said Chile and Argentina are planning to add five new electricity interconnection points in the coming years.

For this, he said the countries commissioned studies with financial support from the Development Bank of Latin America (CAF) to define the geographic points that would make the project most efficient.

“In January we will probably have the result (of the study), with the map of the five main points where there is supply and demand on the other side, and where it is best to put the transmission lines,” he said.

Chile is currently undergoing a broader transmission buildout. In August, Rebolledo told Reuters that the government hopes to have a formal proposal to pitch to investors for a line connecting northern Chile with southern Peru by the end of the current government in March.

Writing by Hugh Bronstein and Gram Slattery; editing by Diane Craft

Our Standards:The Thomson Reuters Trust Principles.
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