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  HOME | Peru

Gas from Camisea’s Biggest Block to Be Used Domestically in Peru

LIMA – Peru’s government and the consortium developing the giant Camisea natural gas field signed an agreement allowing gas from the field’s largest block to be used to supply the domestic market, President Ollanta Humala said.

This is “an important step in Peru’s history” because the gas will serve to fortify this nation’s energy matrix, Humala said in a ceremony Tuesday at the field, located in a jungle-shrouded area of the southeastern region of Cuzco.

The accord was signed by Humala and representatives of the private-sector consortium, made up of Spain’s Repsol-YPF, Argentina’s Pluspetrol and Tecpetrol, U.S.-based Hunt Oil, South Korea’s SK Energy and Algeria’s Sonatrach.

Until now, the consortium had relied on Block 88 to meet its contractual obligations to a liquefied natural gas export company.

“Our dream of having our own petrochemical hub on the southern Pacific coast is taking shape. This will allow us to create tens of thousands of jobs, particularly in the south,” Humala said.

The agreement will enable gas to be freed up for use by households, automobile owners and industry, the president said.

He thanked the Camisea consortium for “putting on Peru’s jersey” and reaching a negotiated agreement.

The consortium had the option of exporting a percentage of the gas produced at Block 88 in the future, as well as output from other blocks, but the leftist Humala had pledged during his electoral campaign to prioritize domestic use of those reserves.

“We think the gas should be a long-term investment, and so we welcome (the companies of the consortium) to stay because we want to work alongside” them, Humala said.

German Jimenez, the general manager in Peru of Pluspetrol, Camisea’s main operator, told TV Peru that the consortium has agreed to replace the gas from Block 88 with gas from other blocks or “other mechanisms.”

He said the consortium’s initial production capacity had been 450 million cubic feet of natural gas per day, but that with new investments to be made this year that total will climb to 1.6 billion cubic feet per day.

Separately, indigenous rights watchdog Survival said Wednesday that the expansion of the Camisea gas project into lands occupied by isolated Amazon tribes threatens their survival.

It said Humala’s government was challenging and ignoring United Nations’ guidelines on the protection of uncontacted Amazon Indians by allowing the expansion of the gas project, the country’s largest.

In a statement, Survival said past oil and gas drilling has “resulted in violent and disastrous contact” with isolated Indians and produced disease outbreaks that devastated those populations.

“Despite an electoral campaign that promised to respect indigenous rights, Peru’s President Ollanta Humala has done little to guarantee the survival of indigenous peoples,” Survival said.

“The UN’s breakthrough report at last recognizes the rights of uncontacted Indians. Peru needs to read it and respect those who wish to be left alone before entire tribes are lost forever,” Survival director Stephen Corry was quoted as saying in the statement.

Projects to export Peru’s natural gas, which have already begun with shipments to Mexico and Spain, have sparked staunch opposition in the Andean nation.

According to the Energy and Mines Ministry, the Camisea concession area spans 142,000 hectares (350,600 acres) but only 80 hectares are currently being developed and therefore the project’s impact on nature is “minimal.”

Humala’s government divulged a report last year that said Camisea has 11.2 trillion cubic feet of proven gas reserves, an amount sufficient to supply domestic demand and also export gas to other countries. EFE
 

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