Argentina maintains natural gas cuts to industry

BUENOS AIRES, June 16 (Reuters) Argentina's three largest natural gas distributors maintained supply cuts to industry and service stations for a second day today due to a spike in demand from homes in cold weather.

President Nestor Kirchner's government has asked the distributors -- covering half the country's population -- to ration supplies to factories to guarantee normal service to homes as temperatures dropped to freezing during the southern hemisphere's late autumn.

Metrogas supplies Buenos Aires city and southern Buenos Aires province, Gas Natural Ban serves the northern part of the province, and Camuzzi Gas Pampeana supplies La Pampa province and the rest of Buenos Aires province.

Energy prices have been heavily controlled in Argentina ever since a deep 2001-2002 economic crisis, so investment in the sector has been low. With the economy and energy demand booming, energy supplies cannot keep up when demand spikes.

A spokeswoman for Gas Natural Ban told Reuters that for now the company is maintaining the cuts asked for but is watching how consumption and temperatures behave.

Argentina's natural gas exports to neighboring Chile were held at a minimum. Argentina is Chile's sole supplier of natural gas.

Dozens of taxi drivers protested yesterday in downtown Buenos Aires because they couldn't get compressed natural gas from service stations.

Industrial demand was expected to be low on Monday, a national holiday in Argentina. Steelmakers, electricity generators and other big natural gas consumers in both Argentina and Chile generally switch to diesel, coal and fuel oil when they can't get natural gas.

REUTERS GT HT2330