Construction on a major project to boost gas supplies and energy security in Chile is to go ahead after the environmental permit for the project was granted by the country’s regulatory bodies.
GNL Mejillones (GNLM) – a joint venture between Codelco and Suez Energy International – announced that it would immediately start preparatory fieldwork at the site of the LNG regasification terminal, which will deliver up to 5.5 million m3/day of natural gas to a number of power generation clients in northern Chile.
The first gas could be delivered to the terminal in late 2009 or early 2010, according to Suez, which owns stakes in Chilean electricity companies Electroandina and Edelnor as well as a controlling stake in the gas transportation company Gasoducto NorAndino.
Construction of the jetty and on-shore LNG regasification terminal is due to start in the next few months. Gas from the Mejillones terminal will be delivered to a number of mining and electricity companies, including BHPB, Escondida, Codelco Norte and El Abra, which have signed gas sale and purchase contracts with GNLM to cover their electricity generation needs for a duration of three years from 2010.
GNLM has also signed an LNG supply agreement with SUEZ for the same volume and duration.
“This innovative fast-track LNG scheme is crucial for Chilean energy security and ensures a supply of natural gas for our power generation assets in the country,” said Dirk Beeuwsaert, CEO of SUEZ Energy International.
For LNG storage, the project will use a conventional LNG carrier, referred to as a Floating Storage Unit (FSU), which will remain permanently moored to the jetty. A decision on the second phase of this project, the construction of an onshore storage tank to replace the FSU, will be reached by the end of the year.
Electroandina and Edelnor are respectively the largest and second largest generators in Chile’s northern electricity network (SING). They have a combined capacity of 1620 MW.