The Northeastern Gas Pipeline (NGP) from the MERCOSUR-Chile axis in hub number five was one of IIRSA’s 31 primary initiatives. The project’s main purpose was to transport reserves located in Bolivia and Northeastern Argentina to meet Argentina’s consumer market demand, as well as to export gas to Chile.
The Northwestern Gas Pipeline was cancelled due to Bolivia’s difficult political and social crisis around oil and energy issues at the beginning of this year. Instead, stakeholders began to analyze a Chilean proposal to import gas from Peru (Camisea) excluding Bolivia, and from there supply to the rest of the MERCOSUR countries –“The Energy Ring.”
However, the Energy Ring project became a new initiative after MERCOSUR’s Energy Ministers met in Montevideo last October to discuss regional integration issues with their counterparts in Chile and Peru, this time also including Bolivia. The meeting focused on the creation of a new project named “the South American Gas Pipeline,” through which Bolivia and Peru would provide natural gas to the bloc of MERCOSUR member countries and Chile. The meeting included Inter-American Development Bank (IDB) officials as well as representatives from the World Bank, which is willing to provide technical and financial support for the integration project.
Tensions arose in the last few months due to the fact that oil-exporting countries often make export commitments, while failing to provide energy services to their own populations. Peruvian President Alejandro Toledo, for example, forbade his Energy Minister to continue in the South American Gas Pipeline negotiations, calling for the “provision of gas to our own country before signing onto new accords.” At the same time, Chile is seeking other alternatives, focusing on Venezuela’s gas supply.
However, the South American Gas Pipeline will most likely become a reality at the next country meeting planned for December 8th of this year. The purpose of this meeting is to agree on the project’s institutionalization through a legal framework to be completed at year’s end. Although the South American Gas Pipeline is not yet a formal component of IIRSA, IDB internal sources indicate that it might be incorporated in the official agenda of IIRSA projects as soon as negotiating countries reach an agreement.