Chile's GNL Quintero expansion to boost partners' generation, distribution businesses

Monday, October 28, 2013

Chile's GNL Quintero dual expansion project is expected to impact both power generators and natural gas distributors.

Last week energy minister Jorge Bunster placed the first stone on the expansion project of the country's main LNG terminal, jointly owned by Enagás, Oman Oil, Enap, Endesa Chile and MetroGas.

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The expansion will both add a new regasification train, increasing the import capacity of LNG by 50% to 15Mm3/d, and double the terminal's capacity to fill "virtual pipeline" tanker trucks to 2,500m3/d (50 trucks, equivalent to 1.5Mm3/d of standard natural gas).

The US$25mn regasification expansion is expected to be completed in 2H14, according to a ministerial statement, while the US$7mn filling station expansion is scheduled to come online in 1H14.

The increased availability of LNG will allow generator Endesa Chile to improve the performance of its Quintero plant, local press quoted Endesa CEO Joaquín Galindo as saying at the inauguration.

Endesa plans to spend US$600mn to upgrade its gas/diesel thermo plants in Quintero and Taltal to combined cycle units, increasing the firm's installed capacity by 240MW. The additional capacity will be used to bid in the upcoming power auctions for distributors, according to local press.

Chilean state oil company Enap's improved LNG supply contract with BG (LON: BG) and the expansion project will allow Enap to boost its virtual pipeline business to generators and industrial clients, according to Enap CEO Julio Bertrand.

Breaking ground at Quintero comes in the wake of GNL Mejillones' decision to shelve a project to increase capacity of the LNG regasification terminal in northern Chile due to lack of demand.