Origin pulls out of Chile cogeneration project

Tuesday, November 4, 2014

An embattled project considered one of Chile's few thermo power success stories in recent years has hit another snag.

National oil company Enap confirmed that Australia-based Origin Energy will rescind its 70% stake in the two firms' JV construction of a cogeneration plant at Enap's Aconcagua oil refinery.

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The project, which received environmental permits in 2007, originally called for a 165MW three-turbine cogeneration plant and a 414MW combined cycle plant.

Community opposition and a lawsuit temporarily halted works on the cogeneration plant, for which Enap agreed to reduce the capacity to 77MW.

The lawsuit was eventually withdrawn, but Enap's subsequent lack of advancement on modifications to the project led Origin to relinquish its controlling stake, the latter company told local daily El Mercurio.

One of Enap's principal changes to the plan was a decision to install an additional backup system to ensure a constant flow of steam to the refinery, the NOC said in a statement.

"We regret the departure of Origin as the principal actor in this project's development," Enap said. "The latest engineering reports showed the necessity of making modifications to protect the refinery's operations, which meant extending negotiations to implement the new requirements."

Enap will continue with the project, but will seek a new partner, the statement said.

The plant will cover the refinery's steam and electricity demand using recycled water from the refining process, and inject excess power output into the SIC grid.

Origin indicated it is still willing to participate in the project, but only as a minority stakeholder. Before Origin's departure, the plant was scheduled to come online in 2016.

BNamericas will host its 11th Southern Cone Energy Summit in Lima, Peru, on November 12-13. Click here to download the agenda.