Chilean energy firm GasAtacama sees miners paying over $4-billion for 20 years of power stemming from a liquefied natural gas (LNG) project it plans to launch in the country's copper-rich north, CEO Rudolf Araneda told Reuters on Thursday.
GasAtacama is to invest $350-million for a Floating Storage Regasification Unit (FSRU) seaport in the Mejillones region that will offer at least 500 MW to power-hungry miners in the area.
"500 (megawatts) via LNG for 20 years, we're talking about a number above $4-billion dollars... We're looking at various mining companies," Araneda told Reuters during a conference on wind and solar energy in Santiago.
"We're preparing an offer than we're going to submit to the miners... There will be tenders next year."
Miners in world No 1 copper producer Chile are reeling due to what critics slam as unclear regulations that expose billions of dollars in power projects to the risk of lawsuits, shaky transmission lines and increased environmental activism.
On its web site, GasAtacama lists world No 1 copper mine Escondida, operated by BHP Billiton, and world No 3 copper mine Collahuasi, jointly operated by global miners Anglo American and Xstrata, as clients.
More than $22-billion and over 8 000 MW in energy investment are currently suspended due in part to legal disputes and regulatory delays, according to Libertad y Desarrollo, a conservative think-tank in Santiago.
After the Supreme Court rejected Brazilian billionaire Eike Batista's planned $5-billion Central Castilla plant in August, many industry experts forecast power-intensive miners in the North would have to turn to LNG or diesel generation.
"We're negotiating (with suppliers in the US)," Araneda added, as a shale gas boom galvanizes interest.
"The idea is to have an offer developed this year."
In the US, a shale gas boom has resulted in a sharp rise in natural gas production, leading to a collapse in domestic prices and the possibility of the US exporting liquefied natural gas by 2015.
Golar LNG, a liquefied natural gas shipping company, was awarded GasAtacama's FSRU project, it said in July.
"The newbuild FSRU will be capable of storing 170 000 m3 of LNG and ...will be delivered to the project in the fourth quarter of 2015," Golar said in a statement at the time.
GasAtacama's power offer to miners will also likely include a percentage of renewable energy, Araneda said.
Edited by: Creamer Media Reporter