Santiago (Platts)--28Jan2013/523 pm EST/2223 GMT

Bolivian President Evo Morales on Monday offered to grant Chile access to his country's sizable natural gas reserves if the two countries can resolve a century-old dispute over Bolivia's access to the Pacific Ocean.

Speaking at the first summit of the Communities of Latin American and Caribbean States in Santiago, Morales said Bolivian natural gas could slash the amount Chile pays for energy if a deal could be reached.

"Instead of paying $300 a month on gas at home, you would pay less than half. The Chilean state would save $900 million a year," he said.

In exchange, he demanded that a solution be found to his land-locked country's claim to access to the Pacific Coast, which Chile annexed during a 19th century war that also involved Peru.

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A deal, however, does not seem imminent. In response, Chilean president Sebastian Pinera that he could never give up sovereignty over territory Chile considers its own and said his country is complying with the 1904 Peace Treaty between the two countries.

Chile, which already pays some of the South America's highest electricity bills, is facing another energy crunch later this decade after a series of major energy projects were delayed or canceled.

Following the loss of cheap gas from neighboring Argentina in the last decade, the country has turned increasingly to imports of coal, diesel and LNG.

The government says the country needs to build 8,000 MW of installed capacity by 2020 to meet growing demand for power, particularly from the mining industry.

--Tom Azzopardi, newsdesk@platts.com
--Edited by Jeff Barber, jeff_barber@platts.com

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