Chilean Energy Minister Ximena Rincón recently toured the Vaca Muerta field in Neuquén province, extending an invitation to Argentina to utilise their Pacific coast ports for the export of oil and gas to Asian markets. A communiqué from Chile’s foreign ministry provided additional insights on the proposal. “Chile can serve as a close, stable, and complementary regional market for Vaca Muerta’s energy production, offering port infrastructure, LNG [liquefied natural gas] terminals, regulatory expertise, logistical capabilities, and a strategic geographic location for exploring, in the long term, potential routes to Pacific markets,” the text explained. The rationale for the offer is evident, given that Chile relies on imports for nearly all of its hydrocarbons. This situation renders them vulnerable to fluctuations in prices stemming from the conflict in the Middle East. Santiago has been depending on the reserves of its neighbouring entity. In 2025, 20% of energy imports originated from Argentina, amounting to US$2.8 trillion. This positioned Argentina as Chile’s second-largest energy supplier, following the United States. The ambitious plan, however, encounters a challenge inherent to Argentina: government bureaucracy and the nation’s lacklustre history as an energy exporter. Daniel Dreizzen stated to the Herald that exporting via the Pacific would represent a significant advancement for Argentina, considering that Latin America is “completely fragmented in terms of energy.”
There are two particular reasons, however, that render this challenging to accomplish. “The first is that Argentina will always want to carry out [these projects] on their side, both from a political standpoint and in terms of what it means for development,” he argued. Two LNG export projects are presently under development along the Atlantic coast in Río Negro province. The first is Argentina LNG, spearheaded by the state-owned oil enterprise YPF, in collaboration with Italy’s Eni and Abu Dhabi’s Adnoc. The other is being driven by Southern Energy, a consortium comprising PAE, YPF, Pampa Energía, and Harbour Energy. The additional rationale provided by Dreizzen is that it would also present a risk for Chile, as it would necessitate dependence on a project located in a foreign nation. He referenced a historical instance from 19 years prior, when Argentina suddenly halted gas deliveries to its neighbouring country. A cold snap caused demand to spike in Argentina, which was unable to meet its commitments to its neighbour due to declining local production. This prompted the nation to focus on its internal market and swiftly halt the supply. “[Chile] had to import liquefied natural gas to generate electricity domestically, which was extremely expensive, and had to bring in regasification plants that it still uses today,” Dreizzen explained.
Relations between Argentina and Chile, however, are improving, he added, and there are “many points in common.” Three weeks ago, Neuquén and the Biobío Region in Chile advanced their energy and trade integration by signing a series of agreements designed to enhance oil and gas exports. During that meeting, the parties reached a consensus to establish the Neuquén–Biobío Roundtable for Energy Cooperation and Integration, aimed at fostering initiatives concerning hydrocarbon transportation and the complementary provision of natural gas and electricity. Dreizzen stated that the most challenging issues are the weather conditions at Chilean ports, including rising sea levels and frequent heavy swells. “They need to improve drainage so that larger ships can enter and the weather has less of an impact,” he said, adding that the Trasandino Oil Pipeline connecting Neuquén with the Biobío region would also need to be upgraded. Daniel Gerold informed that the gas pipeline extending from Neuquén to central and northern Argentina — which would subsequently link to the outskirts of Santiago, Chile — requires expansion. Infrastructure work would also be necessary in Chile. He referenced the Quintero LNG import terminal, a port located near Valparaíso, which accommodates the LNG receiving facility managed by companies in Chile. Gerold asserts that investments are necessary to liquefy the gas arriving through the pipeline from Argentina and to convert it into LNG for export. He also emphasised that, despite the historical tensions between the two countries regarding gas supply disruptions, there exists “a favorable environment for all these initiatives to thrive.”
Even if those obstacles are overcome, there would still be issues to resolve, according to the Argentine Center for Political Economy. “The risk is that the ambition to reach Asia will run aground on government bureaucracy,” they warned. In one of its latest reports, the think tank argued that the success of such initiatives “depends entirely on resolving a complex web of bureaucratic, idiosyncratic, tax, and customs-related friction that currently acts as invisible yet effective barriers.” CEPA economists indicated that exporting via third countries necessitates a “international transit” framework that presently “lacks the necessary flexibility.” They argued “Determining who collects what, how royalties are calculated in an indirect export scheme, and which tax exemptions apply to avoid double taxation are questions that, if not resolved through clear bilateral treaties, will turn logistical efficiency into an unaffordable cost.” Customs authorities in both countries, they explained, “must coordinate protocols that allow for absolute product traceability without causing delays that erode profit margins.” And “Ultimately, the development of this export channel is a test of maturity for regional integration.”