Argentina has begun exporting natural gas to Chile after a 12 year interlude, Chilean President Sebastian Pinera said on Tuesday, as the two South American neighbors seek to increasingly integrate their energy supply and electricity grids.
The unconventional gas is being piped from Argentina’s oil- and gas-rich Vaca Muerta shale field in the Neuquen basin, then sent over the Andes mountain range to Chile’s southern province of Biobio.
“We are working enthusiastically with (Argentine) President Mauricio Macri to integrate our energy supply,” Pinera said in a speech.
The exports mark a turning point in energy trade in the region. Argentina, which sits atop the world’s No. 2 shale gas reserves, was once a major supplier of natural gas to Chile, but triggered a diplomatic crisis in the mid-2000s by cutting off shipments when its own supplies ran low.
The move sent Chile, a global mining powerhouse that has few hydrocarbons of its own, scrambling to find new sources of supply. The spat also helped foster a move towards alternative energy sources like wind and solar in Chile.
Pinera said the two countries had very different, but often complementary, energy needs, and that depending on the time of year and circumstance, could either export or import fuel and electricity across their shared border.
“This will permit us to back one another up without having to spend excess money to do so,” he said.