Chile’s Colbun FSRU project hits delays as supply talks begin

Chilean generator Colbun has pushed back to 2017 the estimated start date of its proposed floating storage and regasification (FSRU) import terminal, as the company has reported delays in finding a suitable site for its facility.

Colbun and project partner AES Gener, another generator on Chile’s central Sistema Interconectado Central (SIC) power grid, had originally planned for the project in the Quintero Bay, off Chile’s central coast, alongside the existing 2.5 million tonne per annum (mtpa) Quintero LNG onshore terminal.

However, complications with the preferred site have forced the company to reconsider locations, a source close to the matter told ICIS.

“Colbun has experienced certain delays, but the project is salvageable. The project is still going ahead, though we are examining different locations in and around the central part of the country,” the source said.

Norwegian shipping company Hoegh announced in September 2012 that it had been selected as the preferred bidder in a tender organised by Colbun and AES Gener for the provision of an FSRU with capacity to supply up 10 million cubic metres/day.

Delays in the project have led some market participants to call this pre-selection agreement into question. A spokesman for Hoegh, however, said the company remains the preferred partner for the project.

“We are still in the position of preferred bidder, though negotiations over the final project are ongoing,” the spokesman said.

Supply talks

Colbun has initiated supply discussions with potential sellers for a 10-year supply contract after launching a call for interest in March, according to market sources.

A source close to the project said discussions were still in an early stage: “We have been looking at the market, seeing what is on offer. There’s been a lot of interest, especially from suppliers in the US, though we don’t expect to announce anything imminently.”

Although the FSRU project will be carried out in conjunction with AES Gener, ICIS understands that the companies will separately pursue potential supply contracts.

Both Colbun and AES Gener currently buy gas from offtakers at the GNL Quintero LNG facility, and a decision to expand capacity at that existing terminal had also raised questions over the viability of the generators’ plans.

The stakeholders at Quintero, which include the local arm of Spanish generator Endesa Chile, state oil company Enap and local gas distributor Metrogas, propose to add an extra 1.25mtpa in capacity at the terminal through the expansion project, which is due to be completed next year.