Gas Natural Fenosa plans to invest $1.1 billion over the next decade to double its number of clients at Chilean subsidiary Metrogas to 1.5 million, from around 700,000 currently, CEO Rafael Villaseca said Tuesday.
During the first five years, most of the new clients will come from existing concession areas in the capital Santiago and nearby Rancagua, but as it is granted additional concessions, it plans to add around 500,000 clients in areas where it is not currently present.
The company will use cryogenic tankers and regasification plants to distribute gas imported through Chile's two LNG terminals, said Metrogas CEO Victor Terpaul.
Metrogas owns a 20% stake in the Quintero terminal in central Chile.
Applications for concessions made this year in its target areas are to be granted within 12 months, allowing construction work to begin by the end of 2016.
Villaseca said that the expansion plan was in line with the Chilean government's aim of increasing gas demand in order to reduce consumption of more polluting fuels. Many cities in southern Chile suffer from poor air quality due to widespread use of firewood for heating and cooking.
He said that the company would use tough competition to attract clients from alternatives such as paraffin and LPG.
But the executive said he was not worried by legislation in Congress to more tightly regulate gas prices in the country.
"We trust that this bill will foment the development of the industry in the country," he said.
Earlier this year, Metrogas cut gas prices in Santiago after the government accused of the company of exceeding permitted profit levels.
Gas Natural Fenosa entered Chile late last year when it acquired Chilean energy group CGE which it held a major stake in Metrogas. It increased its stake to 60% after buying shareholder Trigas. The balance of shares are owned by Chilean industrial conglomerate Empresas Copec.
