Projects

LNG to the Eight RegionStructure of the Business

On September 29 this year, the pool of Chilean companies taking part in the LNG project in Quintero (ENAP, Endesa Chile and Metrogas), and GNL Chile, signed an agreement with BG Group establishing the structure of the business, identifying and regulating the activities to be carried out and, in its essential part, defining the conditions of LNG supplies and the storage and regasification services.

The agreement includes the basic terms of the gas sale contracts and the development of EPC (Engineering Procurement and Construction), including the option for early supplies in order to advance the start-up of the LNG complex.

GNL Chile announced that the preliminary activities being carried out in Quintero (soundings, earth movement, topographic studies, oceanographic readings, etc.) and negotiations of the final commercial agreements will be completed within the next few months.

GNL Chile also reported that it is negotiating with Chicago Bridge and Iron (CB&I) the preparation of the project’s EPC agreement on a turnkey basis, with a set price and term for the design, construction, assembly and start-up of the complete terminal, including the implementation of the fast track supply option.

The chief executive of GNL Chile, Antonio Bacigalupo, said that these contracts will permit advancing the placing of orders for equipment and materials with long delivery terms and some critical sub-contracts for the project’s development.

The executive said that although it was originally planned to supply gas in 2009, “we are today making every effort for advancing the start-up by one year. When the LNG complex in Quintero is fully operative, it will permit meeting around 40% of natural gas demand in Chile”.

The LNG project, once functioning, will supply natural gas permanently to different customers in central Chile. Endesa, Metrogas and ENAP (which will also supply Enagas and GasValpo) have committed to firm demand for over 6 million cubic metres a day.

The project also contemplates the construction of a 1,600 metre long quay, the installation of unloading arms, two LNG storage tanks of approximately 160,000 cubic metres each, a 10,000 cubic metre tank as part of the fast-track option and a vaporization station.