Argentina limits natgas exports to ease crisis

Argentina's government said recently it would limit monthly natural gas exports to 2003 levels through September in an attempt to manage the country's worst energy crisis in 15 years. "No exports will be authorized beyond the levels reached in 2003," the government stated in the federal Official Bulletin.

The measure comes after regulators cut power by 20 percent to dozens of industrial users, such as steel and auto makers, forcing them to turn to more expensive fuel-oil generators.

Argentina faces a shortage of natural gas, a major source of fuel for electrical generators, as well as dry weather which has reduced hydroelectric power.

Officials say they will cut natural gas exports to ensure domestic needs are met. Chile's economy minister said recently that at least three electrical plants in northern Chile will be affected by Argentina's plans to reduce gas supplies recently.

Chile's electricity sector stocks have fallen in recent days due to concerns over Argentina's gas shortage. Chile depends on its neighbor for more than 90 percent of its natural gas needs, and more than 35 percent of electricity in Chile comes from natural-gas-burning plants.

Argentina's energy secretary traveled recently to Brazil to ask that country to keep supplying Argentina with electricity to ease the crisis, a Brazilian government official told Reuters on condition of anonymity.

Emergency electricity imports from Brazil allowed Argentina's government to lift nationwide voltage cuts imposed the day before.

Argentina's sharp rebound from a devastating 1998-2002 recession has increased local demand for natural gas, and officials worry energy shortages could imperil that recovery. The government has criticized gas firms for not investing in exploration, but companies say a two-year rate freeze and sharp currency depreciation in 2002 greatly hampered them.