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Chile's Codelco sells stake in LNG terminal as energy crisis passes

Chile's state-owned mining company Codelco said Tuesday it has sold its stake in the Mejillones LNG terminal to a local investment fund, noting that the country's energy situation has improved radically in recent years.

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Ameris Capital AGF will pay $193.5 million for the 37% stake in the 5.5 million cubic meters/day GNL Mejillones regasification terminal, which is controlled and operated by French energy giant Engie.

In a statement on the sale, Codelco said changing conditions in Chile's energy markets, such as the resumption of imports from neighboring Argentina, the strengthening of the county's electricity grid and the transition toward renewable energy meant it was no longer necessary to maintain a stake in the facility.

"Given that energy supplies to Codelco's operations in northern Chile are now ensured, the stake had been categorized as a dispensable asset," said Codelco CEO Nelson Pizarro in a note to Chile's financial regulator.

Codelco, the world's largest producer of copper, joined forces with GDF Suez - now known as Engie - to build the Mejillones terminal a decade ago after neighboring Argentina halted natural gas exports. State-owned oil firm ENAP led construction of another at Quintero to supply households and industry in central Chile.

Argentina resumed exports of significant volumes of gas to its neighbor in late 2018.

The imports totaled 873,290 mt in the first five months of this year, reducing LNG imports from Trinidad and Tobago, the US and Equatorial Guinea.

Meanwhile, Chile has added around 5,000 MW of renewable generation capacity in the last five years, bringing down power tariffs, and has also integrated its two main grids, strengthening the supply situation.

Codelco began searching for a buyer for the stake in late 2017, inviting more than 100 companies and investment funds to express interest. Of these, five made binding offers.

The mining company said it will use fund raised by the sale to help finance a huge investment program, valued at more than $20 billion, needed to overhaul its mines.

In a statement filed with the financial regulator, Ameris said the stake had been acquired by its Ameris Infraestructura I Fondo de Inversion fund, and was partly financed by a syndicated loan from the Industrial and Commercial Bank of China and the Agricultural Bank of China.

ENAP retains a 20% stake in the 15 million cubic meters/day Quintero terminal, which is currently controlled by Spain's Enagas.

-- Ingrid Furtado, ingrid.furtado@spglobal.com

-- Tom Azzopardi, newsdesk@spglobal.com

-- Edited by Keiron Greenhalgh, newsdesk@spglobal.com