Regional LNG: Chile to consider buying gas from Australia: Report

Chile would consider buying gas from Australia as part of a plan to build South America's first liquefied natural gas (LNG) port and cut its reliance on imports from Argentina, Chilean President Ricardo Lagos said in Canberra on Thursday.

Chile opened a tender late last month for firms interested in building a US$300 million LNG terminal in the country, with an initial capacity of 8 million cubic metres per day.

"From the point of view of our own energy needs, you here in Australia has plenty of natural gas and we would like to have part of that gas down in Chile," Lagos was quoted by Reuters as saying during a news conference with Australian Prime Minister John Howard.

Chile depends almost exclusively on neighbouring Argentina for natural gas supplies to fuel power plants and homes, but has suffered from Argentinian energy shortages in recent years.

Chile's state oil company ENAP has said it was looking at Russia, Australia, Oman, Peru, Nigeria, Malaysia and Indonesia as potential new suppliers.

Chile and Indonesia signed a memorandum of understanding on LNG supply last December. Under the MoU, Indonesia will supply up to 4 million tons of LNG per annum to Chile.

Australia's biggest resource development, the A$14 billion ($10.5 billion) North West Shelf joint-venture operated by Woodside Petroleum Ltd., is the country's only LNG producer.

But a Chevron Corp.-led A$11 billion LNG project off Western Australia has moved into the key Front End Engineering and Design (FEED) phase with a final investment decision expected by mid-2006 and first gas due in 2010.

The Gorgon project signed a A$30 billion agreement in October 2003 to supply China in what was hailed as Australia's biggest-ever export deal, beating a A$25 billion deal China signed with the North West Shelf the previous year.

Howard said Australia had plentiful supplies.

"We are very, very keen to help," he said. "We're on the look out for new markets." (*)