Penco Lirquén LNG Terminal

From Global Energy Monitor

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Penco Lirquén LNG Terminal is an LNG terminal under development in Chile's Biobío region. There have been no development updates since 2019 and the project is presumed to be shelved.

Location

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Project Details

  • FSRU Owner: Höegh LNG
  • FSRU Lessee: Octopus LNG project
  • Location: Concepción Bay, Bulnes, Biobío region, Chile
  • Coordinates: -36.683333, -73.033333 (approximate)
  • Capacity: 2.7 mtpa, 0.39 bcfd
  • Status: Shelved
  • Type: Import
  • Finance: US$850 million loan package from ten international banks[1]
  • Start Year: 2023

Note: mtpa = million tonnes per year; bcfd = billion cubic feet per day

Background

Penco Lirquén LNG Terminal is an LNG terminal under development in Chile's Biobío region.[2]

Formerly known as the Octopus LNG project, Penco Lirquén comprises a floating storage regasification (FSRU) LNG port terminal in Concepción Bay. The LNG project is expected to have capacity of 0.39 bcfd and will send gas to the onshore network via a 2.5km submarine pipeline.[3]

The Penco-Lirquén LNG import terminal is a joint venture of Biobiogenera (50%) and Cheniere Energy (50%). Biobiogenera itself is a joint venture between Andes Mining & Energy (a Chile-based independent power producer) and Beacon Investments (a Chile-based industrial group).[4] The LNG terminal is mainly meant to source LNG to the proposed El Campesino power station, which is being developed as a joint venture between Biobiogenera and Electricite de France (EDF).[5]

In May 2015, Norway’s Höegh LNG signed a 20 year contract with Penco-Lirquén's predecessor, Octopus LNG, to provide the FSRU (floating storage and regasification unit) for the LNG import project. As of May 2017, the project had been delayed 12-18 months due to environmental concerns.[6]

After six years of delays the terminal was unanimously approved by the Regional Commission for Environmental Assessment in August 2019.[7] However, as of February 2020, plans for construction of the terminal remained suspended due to legal challenges.[8]

Financing

In December 2016 a group of ten international banks agreed to provide loans totalling US$850 million for the development of the Penco Lirquén LNG terminal and the 640MW El Campesino combined cycle gas turbine plant. The banks involved are: DNB Nord, Societé Générale, Mitsubishi UFJ, Crédit Agricole, Sumitomo Mitsui Banking Corporation, BNP Paribas, KDB, Scotia, BCI and Siemens.[1]

Opposition

On June 28, 2016, the Evaluation Commission of the Biobio Region approved the LNG terminal project. Various parts of the province were subsequently blockaded by citizens protesting the project's approval on the grounds that proper environmental regulatory procedures had not been followed. In addition to the blockades, there was a strike among public sector workers who then demonstrated in the streets. According to reports, the demonstrations were met with police repression. In the neighborhood of Lord Cochrane and the Lirquén Hospital, demonstrators blockaded traffic in protest of the Penco-Lirquén terminal and its potential environmental impacts. Seven people were arrested.[9]

In February 2017, the LNG terminal project had its environmental approval revoked by the Chilean Supreme Court. The ruling was the result of a lawsuit brought forward by the Konintu Lafken Mapu Indigenous association. The court stated that the original permit granted by the regional environmental evaluation service acted illegally by prematurely terminating the project’s indigenous consultation phase.[10]

Articles and resources

References

  1. 1.0 1.1 [1] IJGlobal, Dec. 29, 2016
  2. Penco Lirquén LNG Terminal, BNAmericas, accessed April 2017
  3. Andrés Pizarro Pinto, Juan Sebastián Venegas Molina (2013). "Estimación del Precio de GNL a Largo Plazo: El proyecto Octopus en Concepción". Pontificia Universidad Católica de Chile.
  4. "Hoegh LNG awarded contract for FSRU in Chile". LNG Industry. September 3, 2012.
  5. Cheniere Marketing and Central El Campesino Sign 20-Year LNG Sale and Purchase Agreement, Cheniere Energy, INC., July 30, 2015
  6. Chile’s Penco LNG project delayed by 12-18 months, LNG World News, May 24, 2017
  7. Tras 6 años aprueban proyecto gasífero Terminal GNL Penco, Diario Concepcion, Aug. 30, 2019
  8. "Paralización de GNL Penco: las arremetidas legales de las comunidades indígenas locales". Electricidad. February 11, 2020.
  9. The Fight Against the Octopus in Chile, Earth First! Journal, Summer 2016
  10. Chile Revokes LNG Terminal Environmental Permit, BNamericas, accessed August 2017

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External resources

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