GNL Chile, the marketing consortium for Chile’s Quintero LNG terminal, has selected three power generators as the preferred capacity holders in a planned new expansion of the facility.
Chilean generator Colbun, Israeli power company IC Power and AES Gener, the Chilean subsidiary of the US-based utility, were selected as the preferred capacity owners through an open season, according to GNL Chile. The open season began in November 2014.
The three companies will split 3.2 million cubic metres (mcm)/day of extra capacity which will be added to the terminal. The capacity will be divided based on need, a market source told ICIS, although an exact breakdown could not be confirmed prior to publication.
An additional 1.8mcm/day in capacity made available through the expansion stage has been reserved by GNL Chile and can be offered either to the existing offtakers or new entrants outside the open season process at a later date.
GNL Chile currently represents the Quintero terminal’s three existing offtakers, state refiner ENAP, gas distributor Metrogas and the local arm of power generator Endesa. UK-based BG Group is the contracted supplier to each company.
Under the terms of the open season award, each generator will have until December to take a formal decision over whether to take the capacity.
As part of the open season, participants had to take a minimum of 0.6mcm/day for periods of either 10, 15 or 20 years. Each of the generators are understood to have committed to 20-year capacity terms, with the contract terms set to begin in 2021 when the expansion is due for completion, ICIS understands.
IC Power, Colbun and AES are expected to seek out separate LNG supplies, instead of an aggregator, which has attracted much interest from sellers and trading companies, particularly suppliers with US LNG volumes.
The second expansion phase covers the construction of an additional storage tank and fourth vaporising unit at the terminal, which will increase send-out capacity by 5mcm/day to 20mcm/day, equivalent to 5mtpa.
An initial expansion phase, which took send-out capacity to 15mcm/day, was inaugurated in April this year. The construction took 17 months to complete with an investment of about $30m.
Each of the three generators will be participating in auctions to supply electricity to the Chilean grid currently being organised by county’s national energy commission, CNE. The first auction, which will close before the end of the year, is offering contracts to supply blocks of electricity beginning in 2017.
A second auction, which will close in May 2016, is offering larger supply commitments beginning in 2021.
Colbun already operates nearly 1GW in combined-cycle gas turbine (CCGT) capacity at its Nehuenco I and II and Candelaria power plants, and is understood to be evaluating further additions at its Nehuenco III open cycle turbine. The company currently receives regasified LNG volumes from Quintero, supplied by Metrogas.
IC Power is proposing the development of 540MW CCGT facility known as Los Robles close to the Quintero facility. AES currently operates one gas-fired plant, the 390MW Nueva Renca facility, which is located on the outskirts of Chile’s capital Santiago.
Chile’s government has outlined plans to promote the use of natural gas for fuel generation over recent years. Auctions held over the end of 2014 were the first for several years to award generation blocks to gas fired power plants.
E-CL, the Chilean subsidiary of European energy seller ENGIE, and BioBio Genera secured contracts to provide energy to the grid from 2019. Both companies will use LNG to supply their respective plants, with BioBio Genera supplied by US LNG exporter Cheniere through the GNL Penco project planned for southern Chile. email@example.com