By Matthew Craze and Nathan Gill
May 13 (Bloomberg) — Empresa Nacional del Petroleo, Chile’s state-controlled oil and gas company, said the start-up of a liquefied natural-gas plant will help the company’s refinery business return to profitability.
The Quintero LNG plant will reduce power costs at the company’s Aconcagua refinery by a third starting in August, Chief Executive Officer Rodrigo Azocar said today in an interview.
The company, known as Enap, lost $958 million last year after boosting purchases of crude oil to make up for dwindling natural-gas supplies from Argentina. Enap said the Quintero project will improve profit because its gas will reduce costs at Aconcagua and a second refinery in southern Chile.
Enap will invest $400 million this year in the Quintero project and other improvements, Azocar said. The company on Jan. 15 issued about $330 million worth of bonds in the South American nation’s domestic market.
“For the manager of a refinery, having a stable source of energy is crucial,” Azocar said. The plant “will contribute towards getting good results, getting us back into the black.”
Azocar declined to say if Enap will turn a profit this year. The company will hold a press conference on May 19 to discuss financial performance, he said.
The Quintero plant, which cost almost $1.1 billion to build, has the capacity to entirely replace gas imported from Argentina, Azocar said.
The first gas will be delivered from Trinidad & Tobago by BG Group Plc, Antonio Bacigalupo, general manager of the Quintero plant, said today in an interview.
The extra gas will ensure power availability this year in central Chile, even as drier weather reduces hydroelectric generation, Azocar said.
Chilean Energy Minister Marcelo Tokman told reporters today in Santiago he doesn’t “see any risk” of power cuts in the South American country this year.