Campanario unable to honor Chilectra contract

Chilean thermoelectric generation project Campanario Generación will be unable to supply distributor Chilectra with the power agreed under a contract signed last October, fellow distributor Río Maipo said in a statement last week. Chilectra had signed a contract with Río Maipo in January this year to supply 100% of the latter's power needs for eight years from April 1, 2007. The contract was subject to the US$214mn, 375MW Campanario thermoelectric project coming online and Río Maipo has said that the contract "will not be verified." Chilectra has until March 31 to tell Río Maipo whether it will be able to honor the contract. Campanario Generación is a subsidiary of gas distributor Innergy, in which Río Maipo's owner, energy distributor CGE, has an indirect stake through liquefied petroleum gas (LPG) distributor Gasco. Campanario would be located in Region VIII and use Argentine natural gas delivered through the Gasoducto del Pacífico pipeline. Doubts about the future of the project are a result of the uncertainty regarding future gas imports from Argentina.