The Southern Cone Gas Ring: The Forgotten Gas Supply Solution for Chile and Argentina?

In the midst of gas supply security threats throughout South America, the so-called Gas Ring, an ambitious gas transportation project that would integrate Peru with the Southern Cone markets, was proposed in 2005. Although its political momentum has ebbed and flowed over the past year, the project remains an interesting alternative to the difficulties that Chile, Argentina, and Brazil face in securing access to reliable gas supply after the nationalization of Bolivia's hydrocarbon industry.

* Despite tremendous obstacles, the Gas Ring is probably feasible, although unlikely in the short term, as new reserves need to be developed and cross-border agreements established.
* Natural gas exported from Peru through the Gas Ring could reach northern Chile at a price of US$3.7 to US$5.2 per million British thermal units, depending on gas prices in North America, where it might compete with imported liquefied natural gas (LNG).
* The project could become an instrument of energy diversification for Chile and Argentina , and could permit a wider and faster penetration of natural gas than LNG.

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