SANTIAGO -(Dow Jones)- Chilean power generator Colbun SA (COLBUN.SN) is studying developing a liquefied natural gas regasification plant as prices for LNG are forecast to decline, a company spokesman said, confirming a newspaper report. Colbun, which has thermal generation and hydroelectric plants, has seen its bottom line crimped because of a prolonged drought and delays in starting up its Santa Maria coal-fired power plant. "This idea came about because the gas Chile had been buying is very expensive, making it unusable to generate electricity. That is changing in the world because of new technologies, and prices are going to drop," Colbun President Bernardo Matte said, according to newspaper El Mercurio. LNG has become an important part of Chile's energy matrix in recent years with the Mejillones regasification terminal in the country's north region and Quintero regasification plant in the central region. Chile developed LNG as an energy source during former President Michelle Bachelet's term in an effort to diversify its energy mix and increase security after Argentina started to sharply reduce natural gas exports to its neighbor in 2004. A 2008 drought also severely curtailed hydroelectric production in Chile, helping to drive the development of LNG. The GNL Mejillones regasification terminal, a joint-venture between Chilean state copper mining company Corporacion Nacional del Cobre, or Codelco, and France's GDF Suez SA (GSZ.FR), supplies customers on the SING grid, which is home to the vast majority of the nation's bustling copper mining industry The Quintero plant is controlled by London-based BG Group PLC (BRGYY, BG.LN) and state oil and gas company Empresa Nacional del Petroleo, or Enap, and supplies energy to the nation's largest power grid, the central SIC grid. -By Anthony Esposito, Dow Jones Newswires; 56-2-715-8929; anthony.esposito@dowjones.com
