BG Group Plc, the energy company seeking to sell out of Chile’s Quintero liquefied natural gas terminal, said the transaction is blocked while it remains in fuel-price talks with the country’s biggest power producer.
BG agreed in April to sell its 40 percent of GNL Quintero to Spain’s Enagas SA for about $359 million. The U.K. company, which sold half its interest in September and planned to divest the rest by year-end, is still discussing demands from Empresa Nacional de Electricidad SA to accept market prices for the gas.
“There is a hold on the disposal of the second part of our interest in Quintero LNG,” BG Chief Operating Officer Martin Houston said in London today. The LNG supply contract “was negotiated a very long time ago when the hub price was north of $9” per million British thermal units.
U.S. gas prices fell to a decade-low last year as the nation increased production. The fuel averaged at $2.86 per million Btus, down from a record $13.92 in September 2005. The slump in prices has spurred Empresa Nacional de Electricidad, a shareholder in GNL Quintero, to push for market-linked prices.
BG is still negotiating new fuel supply terms with the Santiago-based company, Houston said today.