Chile Metrogas seeks $241.5m in damages from Argentina

29 August 2013 16:59  [Source: ICIS news]

MEDELLIN, Colombia (ICIS)--Chile's Metrogas is seeking $241.5m (€181.1m) in damages from its former Argentine suppliers over an alleged breach of contract caused by cuts in natural-gas supplies, the gas distributor said on Thursday.

Metrogas filed a lawsuit with the International Chamber of Commerce’s Paris-based International Court of Arbitration on 13 May this year accusing the Aguada Pichana consortium of “failing to honour contractual obligations” in the delivery of natural gas.

Metrogas and the consortium – formed by Total Austral, Wintershall Energia and Pan American Energy – had been under contract since 1997. However, Argentina began limiting natural gas exports to Chile in 2004 as it sought to protect its domestic industry and ensure supplies to homeowners, who use the fuel to heat their homes.

Metrogas terminated the contract in 2009 following a new deal to secure feedstock from a liquefied natural gas (LNG) regasification plant in the central Chilean port of Quintero, a move that has led the Aguada Pichana group to file its own $37m lawsuit against Metrogas.

Metrogas had previously announced that it was seeking $202bn from Argentine fuel company Transportadora de Gas del Norte (TGN) over a similar dispute involving restrictions in gas supply. The contract with TGN was also terminated in 2009.

Cutbacks on gas supply, which are commonly enforced by Argentina during the southern hemisphere’s winter months, have also affected the Chilean petrochemical industry.

Canadian-listed methanol producer Methanex has relied on Argentine natural gas feedstock to supply its four methanol plants in Punta Arenas, southern Chile.

However, insufficient stocks over the last decade have disrupted the company’s Chilean operations, forcing it to relocate two of its four plants to Geismar, Louisiana, while the remaining units were idled at the end of April this year, according to a recent company statement.

($1 = €0.75)

By: Simon West

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