Chile-Argentina gas interconnection : actors and objectives

Abstract

This article examines the process of gas interconnection between Chile and Argentina, focusing on three issues: a. The goals of this policy; b. The negotiation of the 1995 Agreement and the role played by public and private actors; and c. The «Pipelines wars», that is, the competition that decided which firms would deliver the natural gas in Chile. We develop three main arguments. First, we argue that the main goal of this policy was to promote competition in the Chilean electricity sector and to diversify the energy matrix. Second, we contend that on the basis of the Agreement and of recent economic development in Argentina, Chilean public and private actors did not consider the possibility that Argentina could cut the gas supply in the future. Finally, we argue that this case reveals weaknesses in the Chilean «subsidiary state» model.