Chile's state energy firm ENAP is negotiating the terms of a 10-year contract to supply natural gas to a power generator, the country's president said.
Speaking at an energy industry dinner in Santiago on Tuesday, Michelle Bachelet said that the gas, supplied from the Quintero regasification terminal in central Chile would allow the partial operation of a combined cycle plant in the region.
The Chilean government is promoting use of LNG as part of its agenda to increase electricity supplies and bring down high power prices by reducing reliance on more expensive diesel.
The contract will contribute to low the marginal generation costs, especially when rainfall is low, the president said.
ENAP CEO Marcelo Tokman said the firm is negotiating a contract for 1.1 million cubic meters/day of natural gas.
The deal will also promote open access to Quintero, by transferring part of ENAP's regasification capacity at the terminal to the generator company, Bachelet said.
ENAP shares control of Quintero with power generator Endesa Chile and gas distributor Metrogas.
US-controlled AES Corp. and locally-owned Colbun both operate combined cycle plants in central Chile.
The president added that work to expand capacity at Quintero to 15 million cu m/d is expected to conclude early next year while ENAP is promoting a further expansion to 20 million cu m/d. Bachelet said details of the process would be released during the third quarter of this year.
