Chile's Copec pulp unit to invest $70 mln in energy

SANTIAGO, June 3 (Reuters) - Chile's Copec, one of the world's biggest wood pulp exporters, said on Tuesday it will spend some $70 million on a project that will allow it to guarantee energy supplies to one of its largest pulp plants and sell excesses to the central power grid.

The project involves installing a fourth boiler and a 25 megawatt generator at Copec's COP.SN Aruaco pulp plant. The new installation is scheduled to begin operating in the second half of 2009.

"The new installations, on top of satisfying energy and steam requirements for the Arauco plant, will allow it to increase the amount of electricity it supplies to the central power grid to 24 megawatts," the company said in a memo.

Arauco, with production facilities in Chile, Argentina and Brasil, already has nine generating plants with a combined capacity of 538 megawatts, which according to the firm, are capable of injecting 160 megawatts into the central power grid that serves the populous central region.

The Arauco plant produces about 790,000 tonnes of wood pulp annually.

Competitor CMPC CAR.SN, the second largest U.S. pulp producer, recently decided to build a pulp plant in Peru instead of in Chile, due in large measure to higher energy costs in Chile, where drastic cuts in natural gas from Argentina have generators scrambling to supply growing demand.

(Reporting by Manuel Farias, Writing by Lisa Yulkowski, editing by Richard Chang)