Agenda. The generation matrix in SING

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1 Agenda 2 Pontificia Universidad Católica de Chile March 27th, 7 Santiago de Chile Evolution of the electricity offerdemand equilibrium The generation matrix in SING 3 Example of the dispatch order with new gas prices 4 AES GENER CELTA EDELNOR ELECTROANDINA GASATACAMA NORGENER TOTAL 3,595.8 GASATACAMA 22% NORGENER 8% ELECTROANDINA 27% AES GENER 18% Coal Natural Gas Fuel Oil Diesel Hidro Total Dual GasDiesel AES GENER CELTA EDELNOR ELECTROANDINA GASATACAMA NORGENER Total 1,206 2, ,596 1,712 CELTA 5% EDELNOR 20% GAS NATURAL 58% HIDRO 0% CARBON 34% DIESEL 4% FUEL OIL N 6 4% 2,500 1, projected demand 2010 projected demand ED.HYDRO GE.CCSALTA NORG.NTO2 NORG.NTO1 EDEL.CTM2 EDEL.CTM1 CELTA.CTTAR EAND.COALU15 EAND.COALU14 GASAT.CC21 EAND.COALU13 EAND.U16 GASAT.CC11 EAND.COALU12 EDEL.CTM3 CDIQ.MITSUB CDMB.MMBB EAND.FUELU10 EAND.FUELU11 CDIQ.MAN CDAN.MAN CDAN.GMOT CDAR.GMOT CDAR.M2AR CDAR.M1AR CDIQ.MIRLES CDIQ.SULZER EAND.TG3 GASAT.ENAEX CDIQ.TGAS CELTA.TGTAR EAND.TG1 EAND.TG2 hydro coal gas cc fuel oil diesel engines diesel TG energy spot price USD/h Sources: CNE, CDECSING, annual reports

2 The natural gas restrictions to the SING have been increasing each year since the start of the crisis in Argentina 5 6 ZERO natural gas to the SING will lead to extreme prices and risk of rationing by North: SING + Distribution total gas restrictions 1,800 1,600 projected demand 2010 projected demand , MM m3/day , Rationing Risk USD/h Jan05 Feb05 Mar05 Apr05 May05 Jun05 Jul05 Aug05 Sep05 Oct05 Nov05 Dec05 Jan06 Feb06 Mar06 Apr06 May06 Jun06 Jul06 Aug06 Sep06 Oct06 Nov06 Dec06 Jan07 Feb07 ED.HYDRO NORG.NTO2 NORG.NTO1 EDEL.CTM2 EDEL.CTM1 CELTA.CTTAR EAND.COALU15 EAND.COALU14 EAND.COALU13 EAND.COALU12 CDIQ.MITSUB CDMB.MMBB EAND.FUELU10 EAND.FUELU11 GASAT.CC11 GASAT.CC21 CDIQ.MAN CDAN.MAN EDEL.CTM3 CDAN.GMOT CDAR.GMOT CDAR.M2AR CDAR.M1AR CDIQ.MIRLES CDIQ.SULZER EAND.TG3 GASAT.ENAEX CDIQ.TGAS CELTA.TGTAR EAND.TG1 EAND.TG2 hydro coal fuel oil diesel cc diesel engines diesel TG energy spot price Source: CNE Converting the SING to a full coaldependency might in practice not be possible 7 Agenda 8 1, 992 Evolution of the electricity offerdemand equilibrium Oil Coal OC: gas only CC: gas only CC: dual River Thermoandes Norgener Celta GasAtacama Edelnor Electroandina AES Gener Aes Gener Endesa Endesa / CMS Suez / Codelco Suez / Codelco Energy Total: 3,600 Sources: CNE, CDECSING, annual reports

3 Supply/demand in MT 9 LNG Landscape in Atlantic Basin: The price of LNG supply 10 Reserves & Production increases expected in Peru Uncertainty over Bolivia Gas shortages in ST/MT in Chile Tight gas supply in Argentina and Brazil PeCh Ring VBA Ring Projects likely to materialise: Peru LNG Chile LNG Regas Projects dependant on political environment: VenezuelaArgentina pipe Southern Cone Energy Ring LNG Regas LNG Liquefaction The price of LNG is indexed to Henry Hub (HH) The evolution of Natural Gas prices in Henry Hub (HH) 11 Comparison between coal and LNG for the longer term USD/MMBtu Historical Pricing Henry Hub Forward Pricing New liquefaction capacity is expected to reestablish the HH at 6 USD/MMBtu level CERA forecast LNG (USD/MMBtu) USD/ton 60 USD/ton Mar96 Mar97 Mar98 Mar99 Mar00 Mar01 Mar02 Mar03 Mar04 Mar05 Mar06 Mar07 Mar08 Mar09 Mar10 Mar11 Mar12 USD/M MBtu Coal Capex (USD/kW) New coal based generation today shows to be comparable with LNG in the range of 6 7,5 USD/MMBtu

4 Agenda 13 Satisfying demand on the longer term requires new generation and a restoration of a reliable natural gas supply source 14 Evolution of the electricity offerdemand equilibrium 2,500 LNG / NG CC 1,500 diesel TG diesel engines diesel cc fuel oil 500 Dependence on dieselbased generation is neither economic nor sufficient to avoid rationing New coalbased generation serves new power demand coal hydro Average demand Demand growth assumption: + 100/year i.e. average growth 5.54%/year Conclusion for the role of LNG in the SING The risk that the SING faces rationing or black outs before or in 9 is real To eliminate that risk, it is essential to restore a reliable natural gas supply to the SING in the short term, avoiding adverse impacts of continuous use of diesel for power generation (i.e. logistics) THANK YOU VERY MUCH FOR YOUR ATTENTION An independent source of natural gas is recommended on the long term in the SING to keep a diversified generation matrix Coalbased generation will primarily address increase in demand Developing a Regas & Storage LNG facility in the SING is a strategic move to facilitate negotiations for regional gas supply in the mid to long term Frederik JANSSENS Andino frederik.janssens@suezenergy.cl Phone:

5 Activities in 4 regions 18 The SUEZ division responsible for developing power, gas and LNG activities outside Europe North America USA Canada Mexico South America Brazil Peru Chile Argentina Panama SUEZ Global LNG Middle East Asia Thailand Laos China Saudi Arabia Abu Dhabi Oman Bahrain Turkey Yemen International South America 19 Suez Global LNG 20 South America includes operations in: Argentina Brazil Chile Peru

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