EIG and Fluxys partner in key LNG infrastructure supporting decarbonization in Chile
EIG, a leading institutional investor to the global energy and infrastructure sectors, and Fluxys, a leading energy infrastructure company, today announced that they jointly will acquire an 80% equity stake in GNL Quintero S.A. (“Quintero”), the largest liquefied natural gas (LNG) regasification terminal in Chile, from Enagas Chile SpA and affiliates of OMERS Infrastructure. Terms of the transaction were not disclosed.
Quintero is a key energy infrastructure business supporting Chile’s decarbonization strategy with a bridging fuel that allows for the reconciliation of economic growth with the uptake of renewables and the phasing out of coal. Operational since 2009, Quintero is the largest terminal for receiving and unloading LNG in Chile, as well as for its storage and regasification capacities. The terminal benefits from its strategic location in Quintero Bay, supplying a diversified base of customers in central Chile across residential, commercial, industrial, transportation and power generation sectors. The terminal owns 75% of the country´s LNG regasification capacity and in 2021, 67% of the total natural gas imports (both LNG + pipeline imports) arrived in Chile through this strategic asset. With a daily regasification capacity of 15 million m3, an LNG storage capacity of 334,000 m3 and 2,500 m3 per day of truck loading capacity, the terminal is a reliable supplier of natural gas to the country, that contributes to its energy diversification and security.
Chile has world-class solar and wind resources and a RES capacity equivalent to 4% of total global energy demand. The country is aiming to become one of the world’s three largest green hydrogen producers with plans to install 200 GW of renewable power by 2040 to produce green hydrogen. Chile already has signed several agreements to promote the export of green hydrogen, among others with the Belgian ports of Antwerp/Zeebrugge, Germany, the Port of Rotterdam and South Korea.
The acquisition builds on EIG’s presence in the Chilean market, where the firm owns Cerro Dominador, a groundbreaking solar complex that combines a 100MW photovoltaic (PV) plant with a 110MW concentrated solar power (CSP) plant. The PV plant has been operational since 2017 and the CSP plant was successfully synchronized with Chile’s electricity grid in April 2021. EIG also is a partner in AME S.p.A, a Chile-based project developer and independent power producer. AME co-owns Generadora Metropolitana, the fifth largest electricity generation company in Chile, as well as HIF Global, a leader in the hydrogen and e-fuels sector, with a series of commercial-scale projects in development and expected to reach construction over the next several years.
For Fluxys, the partnership is a forward-looking investment creating a foothold in another country in Latin America where the energy transition stands high on the government agenda. With its abundant solar and wind resources, Chile aims to produce the world’s cheapest green hydrogen. The Belgian Hydrogen Import Coalition with Fluxys as partner has affirmed the competitiveness and feasibility of a green molecule supply chain from Chile to Europe and Belgium.
"We are thrilled by the opportunity to invest in Quintero, a company that aligns perfectly with our focus on strategic, high-quality infrastructure that is critical to the region it serves and yields attractive, contracted cash flows," said R. Blair Thomas, EIG’s Chairman and CEO. "We are pleased to be partnering again with Fluxys, a world-class operational partner, to help Quintero support Chile’s energy needs and transition goals with reliable energy. Quintero’s strong presence in natural gas infrastructure serves as an attractive launching point to expand its presence in related and adjacent sectors, including storage, truck loading and regasification, as well as to develop production capacity for green hydrogen, where Quintero has significant potential to be a domestic leader in the nascent industry."
"With 3 LNG terminals in Europe, our ambition to invest outside Europe and to become the transporter of new energy carriers, Quintero is a perfect fit with our strategy for growth in view of the low carbon future", said Pascal De Buck, Fluxys’ Managing Director and CEO. "We want to deploy and expand our industrial expertise worldwide and are excited to partner with EIG as leading global energy infrastructure investor already intensively involved in energy transition projects in Chile. Our partnership in Quintero brings Fluxys closer to hydrogen developments in Chile and supports the import of hydrogen in Belgium. We are looking forward to collaborating and developing new opportunities with Quintero’s management and workforce."
The transaction is expected to close in the second half of 2022, subject to customary closing conditions, including any required merger control and related regulatory approvals.
Citigroup Global Markets Inc. acted as financial advisor to EIG and Fluxys in connection with the transaction. White & Case LLP served as EIG’s legal advisor and Linklaters LLP served as Fluxys’ legal advisor.
EIG is a leading institutional investor to the global energy and infrastructure sectors with $23.0 billion under management as of December 31, 2021. EIG specializes in private investments in energy and energy-related infrastructure on a global basis. During its 40-year history, EIG has committed $39.7 billion to the energy sector through 379 projects or companies in 38 countries on six continents. EIG’s clients include many of the leading pension plans, insurance companies, endowments, foundations and sovereign wealth funds in the U.S., Asia and Europe. EIG is headquartered in Washington, D.C. with offices in Houston, London, Sydney, Rio de Janeiro, Hong Kong and Seoul. For additional information, please visit www.eigpartners.com.