Mejillones LNG Terminal, Antofagasta, Chile

Natural gas is fast becoming the preferred fuel of the future. With a supposed cleaner reputation than coal or oil as fuel for domestic use and power generation, countries around the world are fast constructing LNG regasification terminals so that they have the facilities to provide for their energy needs over the next 25 to 50 years.

Chile is no exception and with its previous reliance on Argentinean gas is now equipping itself to receive gas imports from further afield. Chile has other LNG projects under construction such as Quintero Bay and now there is also a project in Mejillones, Antofagasta (northern Chile). Northern Chile is still under severe gas supply restrictions from Argentina. Mejillones is also the area chosen for a new super port that will be completed by 2030.

MEJILLONES LNG PROJECT

The new LNG project began in October 2007 and is being developed by Suez Energy International in a 50/50 partnership with Codelco (a major world copper producer) as the joint venture GNL Mejillones SA (GNLM) supported by Gas Strategies of London.

The investment for the new plant is around $500m and construction will begin in mid-2008 with an expected commissioning date in 2010 (when the first gas deliveries are expected).

The facilities (first phase construction) will include a single offload jetty and a single on-shore regasification train with a capacity of 5.5 million cubic metres of gas a day (this equates to the production of 1,100MW of electricity).

In addition, for the start-up of the first phase there will be a permanently moored LNG Floating Storage Unit (FSU) chartered by SUEZ Global LNG with a capacity of 135,000m³ to serve as a floating storage facility.

The second phase of construction will see an onshore storage tank constructed of around 160,000m³ capacity as a more long-term solution. The second phase construction of the storage tank is expected to take an additional three years and will be completed by 2012-2013 (feasibility studies need to be completed first).

There are several mining companies involved in the project who have signed contracts to take gas from the terminal over the first three years from 2010 for electricity generation and these include BHPB / Escondida, Collahuasi, El Abra and Codelco Norte (four contracts are worth 450MW). GNLM has in turn signed gas supply contracts with SUEZ.

Dirk Beeuwsaert, CEO of SUEZ Energy International, commented: "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. SUEZ here clearly demonstrates its capacity to deliver prompt solutions to the specific energy needs of a country."

CONTRACTS

The engineering, procurement and supply contracts for the project were signed at the start of October 2007. The terminal is to be constructed by Técnicas Reunidas of Spain, and the jetty by the Chilean company Belfi.

Tractebel Engineering will be the project management engineer and will be responsible for the basic design, coordination and supervision of the construction. A subsidiary of SUEZ Energy called SUEZ Energy Andino will be responsible for the operation and maintenance of the terminal.

By February 2008 all of the environmental permits and other authorisations to build and operate the plant had been granted and construction could get underway.