BG Says Chile LNG Stake Sale Blocked as Gas-Price Talks ContinueEduard Gismatullin
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.