To: bond_bubble who wrote (59004 ) 4/21/2006 2:55:24 PM From: shades Respond to of 110194 Chile's Pres Says Gas Find To Ease Argentina Swap Deals (mass and ENERGY bondbubble - 2 fundamental truths of the universe) PORVENIR, Chile (Dow Jones)--Natural gas deposits currently being explored in remote Tierra del Fuego will likely ease gas swap deals with Argentina, Chilean President Michelle Bachelet told reporters Friday. "There's gas there and it's promising," Bachelet said, referring to state energy company Empresa Nacional de Petroleo's (ENP.YY), or Enap, Lago Mercedes II field. Enap, by late May, will know whether the gas flows in the deposit will be commercially viable. While the full amount of the reserves isn't quite clear yet, Bachelet said she was optimistic about the Lago Mercedes prospect. Potentially, the reserves could supply Chile's southernmost region, Magallanes, until 2020, the president said earlier this month when the find was announced. Officials including former President Ricardo Lagos have said the gas could even replace some of the dwindling reserves from Argentina, currently the sole source of gas for the country. Fuel swaps have played a major role in dealing with shortfalls in natural gas imports from Argentina. A few Chilean generators, including Endesa SA (EOC), managed to deflect gas cuts to their plants last year after agreeing to fuel-for-gas swaps with Argentine companies. Amid rising demand, Chile's power generators have been hit over the past two years by reductions in natural gas deliveries from neighboring Argentina. Under normal conditions Chilean generators would use the Argentina gas to generate around a third of their electricity. The restrictions have forced local generators and manufacturers to use more expensive fuels, driving up energy costs. -By Stephan Kueffner, Dow Jones Newswires; 56-2-460 8547; stephan.kueffner@dowjones.com (Carolina Pica contributed to this report.) (END) Dow Jones Newswires April 21, 2006 14:44 ET (18:44 GMT)