BY GRACIELA IBANEZ
SANTIAGO -- After several months at loggerheads, Endesa and BG agreed to a new LNG supply contract, Endesa said this week.
After Henry Hub prices declined sharply, BG sought to renegotiate the conditions on long term LNG supply contracts signed in 2007 with Endesa, state oil company Enap, and Metrogas.
In a statement, the power producer said the gas deal will help the development of new gas-fired projects in central Chile.
Under the new 20 year deal, BG will sell an undisclosed contracted volume at $8/MMBtu. Any additional gas over the contracted volume will be sold at $11/MMBtu; local Diario Financiero reported citing undisclosed sources.
An Endesa spokeperson declined to comment on the details of the deal saying the contract isn't signed yet.
Last year, BG reached agreements with Enap and Metrogas, but not with Endesa which, as the negotiations turned sour, blocked the UK company's sale of a 20% stake in the GNL Quintero LNG regasification terminal, in central Chile, to Spanish energy company Enagas.
BG, Enap, Endesa and Metrogas are all partners in the GNL Quintero terminal. After selling a 20% stake in the LNG venture for $176 million to Enagas, BG needed the consent of its partners to sell its remaining 20% stake.
The UK company is in the process of divesting noncore assets, such as its stake in GNL Quintero, to finance its $22 billion 2012-2013 capital expenditure plan.
BG remains committed to the sale of its remaining stake in GNL Quintero.
"We are confident a transaction will be completed under a new timeline," a BG spokeperson said.
Dow Jones Newswires