Chilean generator and gas distributor GasAtacama plans to submit an EIA for the construction of the country's third LNG regasification facility near the town of Mejillones in northern region II before the end of this month, the firm's managing director Rudolf Araneda told BNamericas.

"[We expect] to deliver the EIA within the next week. There is no fixed time period for how long it will take to have it approved. We are predicting a date of 2016 to start operations, to give us sufficient construction time," Araneda told BNamericas.

"Investments in the project are large. We require the use of an LNG carrier, that's in the range of US$200mn-250mn, and an FRSU of between US$250mn-300mn. Upfront costs we expect therefore to be in the range of US$500mn."

According to the executive, Chile's maritime authorities have already approved the company's plans to install a floating storage and regasification unit (FRSU) 2km off the coast in Mejillones bay, connecting to the firm's 780MW Central Térmica Atacama thermo plant through an underwater pipeline.

Shipments into the FRSU will be used to meet power demand from expanding mining operations on the SING grid. Demand on the SING is expected to double over the course of the next 10 years. GasAtacama hopes to begin supplying the new mining facilities as they come online from 2016 onwards.

"By the middle of this year we'll have a firm basis of gas supply, boat supply and a floating regasification unit organized so that we can go to the mining companies to offer them contracts," Araneda said.

According to Araneda the company is currently in discussions with gas providers from both Europe and the US in the hope of sorting an agreement before the end of May.

Supply contracts of up to 20 years with a value in excess of US$5bn are envisaged by the Chilean firm.

Excess gas could also be used to the meet the demands of some of GasAtacama's residential and industrial customers, as well as other power generators such as parent company Endesa Chile.

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(Originally published April 19, 2012, in Business News Americas - English.)