Chile, Brazil and Argentina have started talks on a possible exchange of energy resources, Chilean Economy Minister Jorge Rodriguez said in Santiago Saturday.

The minister was quoted by the daily El Mercurio as saying the three nations are seeking a sort of triangular exchange of fuel for electricity.

Under the deal, Chile is to acquire from Brazil electricity amounting to 700 megawatts, before sending it to the Argentine market.

Argentina will pay for the electricity with gas, instead of money.

The possible agreement will lay the foundation for commercial gas and electricity transactions between private firms.

In the face of an energy crisis, it is more convenient for Argentina to pay with gas than cash.

If Chile starts selling electricity to Argentina, it is less likely that the Argentine government will intensify its restrictions on gas to Chile.

Argentina has restricted its gas exports to Chile since March 2004, as its production cannot meet the needs of both the domestic market and that of Chile. Argentina supplies 100 percent of Chile's gas imports, but this year, it cut the supplies by half.

The Chilean electricity firms Nueva Renca and San Isidro and Argentine plants have an exchange system under way.

The companies swap diesel for gas, but diesel is more expensive,leading to an imbalance.

Source: Xinhua