Sponsors of the $900 million GasAndes project that plans to generate electrical power in Chile with Argentine gas have lined up enough firm shippers to begin construction.
Six companies have agreed to ship a combined 353 MMcfd through GasAndes' $350 million international main line. That is 100%, of initial capacity on the 290 km, 24 in. line to be laid from La Mora, Argentina, across the Andes Mountains to Santiago, Chile.
Chilean energy companies that signed the firm transportation contracts are Colbun SA, Endesa, Empresa Electrica Santiago, Metrogas SA, and a combine of Chilgener and Cia. General de Electricidad Industrial.
Nick Kangles, GasAndes general manager and vice-president of the South American region of NOVA Gas International Ltd. (NGI), said pipeline construction crews will begin mobilizing in October. Construction is to begin in November.
NGI, a unit of NOVA Corp., Calgary, leads the GasAndes group with a 40% interest in the main transmission line.
Meantime, in a related development, Chilgener let contract for construction of the 370,000 kw, combined cycle, gas fired power plant to be built near Santiago at Renca as part of the GasAndes project. Chilgener is Chile's second largest power generator and majority owner of the $23-5 million Renca power plant.
NGI owns a 15% interest in the power station.
APPLICATIONS STILL PENDING
The GasAndes main line will link in Argentina with the Transportadora de Gas del Norte by way of a $90 million upgrade project. A $115 million upgrade is planned in Chile to enable the main line to connect with Santiago's gas distribution system.
Gas is to begin flowing through the GasAndes pipeline system by 1997. But first, several other milestones must be achieved.
Producers in Argentina's Neuquen basin, source of the pipeline system's gas, must obtain export permits to move production out of Argentina and into Chile. Also still pending are applications to government for environmental permits and transport concessions.
"We trust they will be granted when we begin construction this spring," Kangles said. Spring begins in November in the Southern Hemisphere.
The tariff from Gasoducto Centro-Oeste in Argentina to the city gate in Santiago will be about 720/Mcf plus an import tariff of about 10%.
In addition to NGI and Chilgener, GasAndes partners include Argentine steel and construction conglomerate Techint; Argentine oil, gas, and transportation company Cia. General de Combustible; Gasco, a Chilean local gas distribution company with investment in Argentina; Chilean industrial conglomerate Copec; Duke Power, a power company based in North Carolina; and Lone Star Gas Co., Dallas.
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