ENAP see small business options of LNG after contract between Colbún and Metrogas
State oil company sought to transfer its fixed cost of participating in the terminal, about $ 70 million to a third party. Now search for customers in the market to place the gas.
Although they have been negotiating for months, the announcement made last week by Colbún and Metrogas, which will have the power to operate its LNG plants until 2019, was a surprise to ENAP, reducing their options to place the oil in the market .
Until last Thursday, the state and generating companies continuing negotiations to achieve a long-term agreement, which among other things involved the transfer of gas and regasification capacity, and also specify the entry of the company of Matte Group to the Quintero LNG Plant Board.
This agreement would allow ENAP to place a significant portion of regasification capacity and gas engaged in the plant expansion that will add 5 million cubic meters per day to the daily 10 MM / m3 with today operates, while reducing – or in this case, transfer to a third, fixed costs that must be incurred by participating in the plant.
Fixed costs are two, and would have an annual fee for ENAP of about $ 70 million. The first relates to the production of hydrocarbon, regasification and as LNG to transport it on trucks, and the other one with access to natural gas, which was established in the modification of contracts with BG, where the company agreed to a take or pay clause event–or full payment for a daily volume of around 2.3 million cubic meters, about half of the volume when the plant will expand its capacity by 50%.-
Sources indicate that only last Thursday Colbún made a new offer to the state company, who rejected it on the grounds that the conditions were “unacceptable”.
Here it was requested that ENAP sell LNG and regasification capacity at cost, leaving no margin of profit to the state oil company, and also that Colbún entitled to a seat on the board of the plant, specifying in this way access to it.
The failed deal left ENAP in an awkward position, since, according to the market-the Matte’s power company was one of the safest ways to reach a long-term solution to reduce the payment to be made to the plant. Today the efforts of the oil company are getting new customers to place the gas which will have more surplus from 2015.
Sources familiar with the issue say the state company is now in talks with other players in the electricity and industrial sectors to place the gas.
“Colbún is always exploring options to access to natural gas that allows to efficiently operate its power generation infrastructure. Under this context, we will continue talking with ENAP and the ability to close a deal to buy natural gas will depend on the conditions are favorable for such an agreement, “they said in the company.
The company, which first signed an agreement to supply medium term, as it had previously renewed for periods of six months, should still get the remaining natural gas for its plants of its Nehuenco Complex and also for Candelaria.
The contract with Metrogas will allow Colbún to have LNG to operate one of the plants of Nehuenco complex for six months each year until 2019, and will leave the dealership with enough space to cover the residential, commercial and industrial customer demand, and also to address their network expansion plan that is now underway in the O’Higgins Region.
The agreement would also covered the take or pay mode, forcing Colbún to dispose of the volume hired of the entire event.
The complex option with AES Gener
While companies from the pool of consumers of Quintero LNG plant (ENAP, Endesa and Metrogas) pledged their participation in the expansion of the plant, with which will have access to additional volumes of hydrocarbons, all compete for long-term contracts with customers that allow them to put that gas in market.
To ENAP, one option would be to establish agreements with AES Gener, who in the past has already purchased gas to operate the Nueva Renca Plant, or sell to Colbún itself, of course in different conditions that were trading with a component purchase more equipment than long term. In any case, AES Gener has repeatedly expressed disappointment that LNG is the solution to the problems faced by the SIC, as it is more expensive than coal, resulting in higher costs of generation.
Added to this is the Nueva Renca plant has been declared as a backup system, reducing its chances of being dispatched, even in the event that the system faced a new dry year.
Source: Diario Financiero
