Three Chilean generators seeking LNG contracts after reserving capacity

Three Chilean generators seeking LNG contracts after reserving capacity

Three Chilean power companies will be looking to sign supply contracts for LNG in the coming months after reserving capacity in a proposed expansion of the country’s largest regasification terminal, GNL Chile said Wednesday.

AES Gener, Colbun and IC Power reserved the whole of the 3.2 million cubic meters/day on offer under an open season launched late last year, GNL Chile said in a statement. The power companies now have until December to confirm their interest in signing a definitive contract.

GNL Chile is owned by local gas consumers ENAP, Endesa Chile and Metrogas, which each own 20% of the Quintero terminal. The balance of shares is owned by Spain’s Enagas and Oman Oil Company.

GNL Chile said that the three companies’ proposals obtained the highest points under the open season qualification process contemplated. The open season aims to attract new clients to the terminal, until now controlled by the shareholders of GNL Chile, and expand the size of the natural gas market in Chile in line with the current government’s pro-gas energy market.

In the past, energy companies have blamed the lack of access to regasification capacity on competitive terms for hindering the growth of the market.

AES Gener, controlled by AES Corp, has become Chile’s largest power generator thanks to heavy investment in coal-fired capacity over the last decade. It also owns the 379-MW Nueva Renca combined cycle plant in Santiago. Colbun, linked to Chile’s Matte business group, owns 1,144 MW of gas-fired installed capacity in central Chile.

IC Power, a subsidiary of New York-listed Kenon Holdings, currently owns two diesel-fired power plants in Chile.

“This result underlines the commitment of GNL Chile’s shareholders to competition on this market and to facilitate investment in the energy sector,” GNL Chile chairman Andres Alonso said.

Under the terms of the open season, companies could apply for capacity — with a minimum of 600,000 cu m/d — under 10, 15 or 20-year contracts, and would obtain the same rights as those enjoyed by the existing users.

GNL Chile said it expects to sign the final regasification and gas supply contracts during the first six months of next year.


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