Boston, MA -- (SBWIRE) -- 08/20/2012 -- BMI View: While exploiting shale gas may be a distant prospect for Chile, it will seek foreign participation in this area as its conventional oil and gas potential is limited. There is no near-term solution to higher imports and rising energy costs.

The key trends and developments in the Chilean oil & gas sector are:

- A Chilean-US business group is expected to create opportunities for North American companies interested in the development of shale gas reserves in southern Chile, reports BNAmericas, citing the president of the Chilean American Chamber of Commerce (AmCham), Javier Irarrazaval. The assessment of shale reserves has been discussed by a panel from the US Geological Survey and government officials. The country's recoverable shale gas reserves are estimated at 1.8trn cubic metres (tcm).
- Spanish gas transporter and grid operator Enagas has signed an agreement to acquire BG Group's 40% stake in the GNL Quintero regasification plant in Chile. The transaction will be undertaken in two equal tranches of EUR136mn (US$179.9mn) each, with the second tranche to be paid in partnership with an unnamed company. Enagas will acquire 51% of the 40% stake in the plant, which has a storage capacity of around 330,000 cubic metres and an annual regasification capacity of about 3.4bn cubic metres (bcm). The EUR272mn (US$359.9mn) transaction is subject to regulatory approval.
- Chilean energy supplier GasAtacama plans to invest between US$300mn and US$400mn in an offshore LNG regasification terminal off the coastline of northern Chile, Valor Futuro newswire reported in May 2012, citing the company's general manager Rudolf Araneda. The power company has submitted an environmental impact study for its proposed LNG floating storage and regasification unit, which would have capacity of 170,000 cubic metres. The company aims to import LNG from the US.
- Chilean oil production is limited and is set to continue declining over our 10-year forecast period, while rising demand is expected to cause import volumes to increase steadily. Domestic oil output is forecast to fall to 5,000 barrels per day (b/d) by 2016, with demand to reach 319,000b/d and imports to reach 314,000 b/d. By 2021, Chile is forecast to be producing just 2,500b/d, with demand to reach 340,000 b/d and imports to account for 337,000b/d of this amount.
- Gas imports will also rise as demand grows. Production is expected to increase to 2015, reaching 1.2bcm, before declining to 0.7bcm by the end of our 10-year forecast period in 2021. Consumption, meanwhile, is forecast to rise from an estimated 5.9bcm in 2011 to 7.7bcm in 2016 and to 9.8bcm by 2021, as the country makes greater use of gas in its energy mix.

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