Endesa agrees with BG a 40% reduction in the price you pay for the gas
Electric Company will generate 763 MW with more competitive costs with the purchase of LNG to U.S. $ 8 per million BTU
After six months of dispute, the companies Endesa Chile and British Gas (BG) reached an agreement for the supply of liquefied natural gas in Quintero’s terminal.
The agreement, which is in the final drafting stage and would be sealed in a six-week-states that electrical firm acquires the hydrocarbon to a value approximately of 40% lower than it paid in late 2012 when it governed the contract prior.
Last year, Endesa paid between U.S. $ 14 and U.S. $ 16 per million BTU, price with the new agreement between the parties will allow to reduce those rates to around U.S. $ 8 per million BTU. In addition, the renewed agreement provides more flexibility in the arrival of the ships and the purchase of liquefied natural gas (LNG) that brings BG to Quintero’s Terminal by 2030.
This last, say industry sources, will enable Endesa without gas, if required, in case of increasing hydroelectric generation or raise oil purchases if it raises its energy production from a higher heat demand.
The greater flexibility also will allow Enersis subsidiary have the input to develop their market entry plan for the marketing of natural gas.
In March this year, the CEO of the group Enel-Endesa Spain controller, which in turn controls Enersis and Endesa Chile, Fulvio Conti, announced the entry into the market the sale of gas to end customers.
Because of the latter, for Endesa it would benefit from a greater amount of gas that facilitates the entry into this new market niche that the company is already developing in Europe.
Finally, the new price of gas will allow Endesa deliver energy much more competitive to the system through its two San Isidro combined cycles, with a combined generating capacity of 763 MW in the Central Interconnected System (SIC).
According to industry sources, not to have reached this agreement, the electric company would have had to buy gas on the market, which meant paying prices close to U.S. $ 16 per million BTU.
This would have meant that the operation of the central San Isidro will be made at a cost of around U.S. $ 130 or U.S. $ 140 per MW / h, what drives her away from more efficient thermoelectric segment. With the contract, the operation cost would reach about U.S. $ 100 per MW / h.
Another advantageous for Endesa is the lower purchase price of gas regarding to its partners in the Quintero’s Terminal: gas distributor METROGAS and the Oil Company ENAP.
The latter two companies reached an agreement with BG at the end of 2012, setting a price close to $ 10 per million BTUs, a rate that exceeds the agreed recently by Endesa and the British company.
Despite this, the acquisition value of the input by the Electric Company is positioned on about U.S. $ 4.5 per million BTU which would come to pay the firm, if it had respected the original contract between the parties .
The latter, because the initial agreement that BG had with Endesa, Metrogas and ENAP stated that from 2013 the calculation formula for the purchase of LNG changed, reducing the price from about U.S. $ 14 per million BTUs, about U.S. $ 4.5 per million BTU.
Source: El Mercurio
