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Chile’s Codelco sells Mejillones LNG stake
INVESTMENT
CHILE’S state-owned mining firm Codelco announced on August 6 that it had sold its stake in the Mejillones LNG terminal to Ameris Cap- ital AGF, a local investment fund. The move comes after the miner secured enough sup- ply from other sources amid an improvement in Chile’s energy markets. Codelco cited the resumption of imports from neighbouring Argentina, the strengthening of the Chilean elec- tricity grid and a shi towards renewables, which it said meant the company no longer needed to keep a stake in the LNG plant.
“Given that energy supplies to Codelco’s operations in northern Chile are now ensured, the stake had been categorised as a dispensable asset,” Codelco’s CEO, Nelson Pizarro, said in a note to regulators.
Ameris will pay $193.5mn for the 37% stake in the 5.5mn tonne per year (tpy) Mejillones regasi cation terminal. France’s Engie oper- ates the terminal and owns the remaining 63% stake. Ameris said its acquisition was partly nanced by a syndicated loan from the Indus- trial and Commercial Bank of China and the
Agricultural Bank of China.
Engie’s predecessor, GDF Suez, partnered
with Codelco over 10 years ago to build the Mejillones terminal a er Argentina halted gas exports to Chile. Shipments from Argentina resumed in late 2018, reducing Chilean demand for LNG imports from Trinidad and Tobago, the US and Equatorial Guinea.
Meanwhile, power tari s have come down in Chile, boosted by additions of around 5,000 MW of renewable generation capacity in the last ve years. e country has also integrated its two main grids, making supply more reliable.
Codelco started seeking a buyer for its stake in the facility in 2017, and said that over 100 companies had expressed interest, with ve sub- mitting binding o ers. According to the compa- ny’s statement, the sale of Mejillones LNG stake will enable the miner to nance part of its project portfolio and focus on copper mining, which is its main priority.
Codelco is intending to overhaul its mines through an ambitious investment programme, valued at over $20bn.
US authorises Gulf LNG exports
PROJECTS & COMPANIES
THE US Department of Energy’s (DoE) O ce of Fuel Energy has approved exports from Kinder Morgan’s Gulf LNG project, which would be located in Jackson County, Mississippi. The export facility would be built at the site of an existing import terminal. Kinder Morgan started the application process to redevelop part of the project for exports in mid-2015.
Under the DoE authorisation, Gulf LNG will be able to export up to 1.53bn cubic feet (43mn cubic metres) per day to countries with which the US does not have a free trade agreement (FTA). e authorisation follows the US Fed- eral Energy Regulatory Commission’s (FERC) decision to approve construction of the project in mid-July. A nal investment decision (FID) still needs to be made on the project.
If Kinder Morgan decides to proceed with Gulf LNG, it will be its second export project a er Elba Island LNG, which is currently mov- ing towards start-up after several months of delays. e two projects are substantially di er- ent – Elba Island consists of 10 small-scale liq- uefaction units, each with a capacity of 0.25mn tonnes per year. Meanwhile, the Gulf LNG liq- uefaction project includes two trains with a total
capacity of up to 11.5mn tpy. e terminal will be bi-directional, retaining the ability to receive gas if market conditions change.
“We are pleased with the Department of Energy’s approval of the liquefaction project at our existing Gulf LNG facility,” Kinder Morgan said in a statement. “While this is an important step, there are still multiple factors that need to be met before reaching a nal investment decision [FID] needed to begin this project.”
Southern Gulf LNG, an indirect subsidiary of Kinder Morgan, owns a 50% stake in the liq- uefaction project through Gulf LNG Liquefac- tion. underbird LNG – a company partially owned by Blackstone Group subsidiary GSO Capital Partners – has 30% in the venture. Sub- sidiaries of Arc Logistics Partners and Lightfoot Capital Partners share the remaining 20% almost equally.
Including Gulf LNG, the DoE has approved 34.5 bcf (978mn cubic metres) per day of exports of LNG and compressed natural gas (CNG) exports to non-FTA countries. Around 14 bcf (396 mcm) per day of this is now in operation or under construction.
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w w w . N E W S B A S E . c o m Week 31 08•August•2019
