GasAtacama has contributed to the continuity of electricity supply in the SING

Since its inception GasAtacama has contributed to the continuity of electricity supply in the SING through the availability of its turbines at the Atacama Power Plant, thus lessening the risk of possible electricity rationing, and ensuring operational continuity to consumers in the Great North, both cities (from small domestic to large industrial consumers), and the large mining companies.

GasAtacama has remained operational despite facing large earthquakes, such as on December 2007, by using its ability to generate on a dual basis (diesel or natural gas), and since April 2010, by using re-gasified LNG.

Similarly, throughout this period, the generation of GasAtacama has been critical to maintain continuity of supply of the SING, with a share of total generation of about 20%, as shown in the chart below.

So much so that during 2010 there were 16 days in which GasAtacama generated with up to 4 GT's, or at full plant capacity, ending the year with an average generation of 3 GT's. Due to the entry of new coal plants, in 2011 GasAtacama participation has declined. Figure 2 shows the evolution of the generation of GasAtacama compared with the rest of the generators in the SING during the period between January 2004 and August 2011.

This is summarized in the fact that had it not been for the operation of GasAtacama Plant, rationing would have occurred in the SING, especially so during 2008.

Given the above, and based on simulations from the actual operation of the SING in the period 2004-2011, GasAtacama estimates that, SING users would have faced, a rationing of 2560 GWh, should it units not been available.

Because demand in the SING is predominantly based on the consumption of mining companies (90%), the cost of rationing is fundamentally linked to the value of copper production not sold, as well as on additional costs of restoring and lifting operations after a power rationing and restrictive operating conditions.

Based on information provided by mining companies, through in supply bidding processes and in conversations held with their representatives, rationing costs run up to 6,000 U.S. $ / MWh (this figure reflects opportunity costs and loss of profit). For purposes of the calculations made by GasAtacama, a conservative failure cost of around U.S. $ 3,000 / MWh was condidered. Thus, GasAtacama´s the failure to supply mining companies would have meant a loss of around 7700 U.S. $ million for the period from January 2004 to August 2011.