Spain's REE Expands Chile Power Grid Interests
Electricity grid operator Red Electrica de Espana (REE), through its wholly-owned Chilean subsidiary, has agreed to buy UK mining group Antofagasta’s power transmission business in Chile for $117.2mn.
The acquisition should help REE expand at a time when Chile is developing new gas import and generation facilities, as well as renewable energy assets. Antofagasta said its sale of Centinela Transmision would raise capital to enable it to focus on its core activity of producing copper. The UK firm had already divested interests in hydro and solar power generation in Chile as part of the same strategy.
Centinela Transmision has three main power lines with a total length of 265 km which feed Antofagasta’s mining operations; the subsidiary was created in November 2016 to facilitate its sale. The UK mining company is named after Antofagasta, a region and port city in northern Chile where its mines and power lines are located.
REE said the acquisition would earn $9mn a year. Once incorporated, it would manage a total network of 1,729 km in Chile, expanding its presence in the north of the country, which together with the 1,314 km of circuit that it manages in southern Peru, would make a cross-border link a natural next step.
In particular, Red Electrica Chile owns 50% of Transmisora Electrica del Norte (TEN), the company that links the northern and the central systems, as well as 70% of Red Electrica de Norte (Redenor) in the Pozo Almonte area, plus interests in southern Peru.
REE’s counterpart in Spanish gas transmission, Enagas, is the majority shareholder in Chile's first import terminal GNL Quintero with an indirect stake of 45.4% (of which 40% directly held). Chile’s two LNG import terminals, Quintero and Mejillones, opened in 2009 and 2010 respectively. A third, GNL Penco, was to have opened this year but has been delayed. Enagas too has interests in Peru's gas grid.
French power giant EDF recently acquired 750 MW of largely gas-fired generation assets in Chile for $300mn; it was already a partner in the GNL Penco project.