The Government of Peru on 9 December signed contracts for the $2bn Camisea gasfields project with two consortia, one of them including Algeria’s state-owned Sonatrach.
Peru’s Energy and Mines Minister Carlos Herrera signed the contracts – one for exploration and production and the other for transportation and distribution – after persuading the winning bidders to reduce the time needed for completion of the project from 44 months to 36 months.
Other modifications in the agreements include ceilings on gas prices of $1/mn BTU for electricity producers and $1.80/mn BTU for industrial clients.
The project is expected to lower Peru’s electricity rates and possibly reduce the country’s annual hydrocarbon deficit of $600mn, Mr Herrera said.
The Camisea gasfield, which has reserves of 13 trillion cu ft of natural gas and 600mn barrels of condensates, is expected to have a production life of 36 years, a spokesman for one of the partners, South Korea’s SK Corp, told Dow Jones Newswires on 11 December.
Plans call for the field to begin producing 145mn cu ft/d of natural gas and 22,000 b/d of condensate and LPG in 2004, rising ultimately to 700mn cu ft/d of natural gas and 40,000 b/d of condensate and LPG.
Exploration and production will be undertaken by a consortium consisting of Pluspetrol of Argentina (operator, 40 percent), Hunt Oil of the US (40 percent) and SK Corporation of South Korea (20 percent).
The partners plan to invest $400mn to develop the concession, including the drilling of 7 wells over a four-year period.
Transportation and distribution will be carried out by a second consortium consisting of Argentinean firms Techint (operator, 30 percent) and Pluspetrol (19.2 percent), Hunt Oil of the US (19.2 percent), Peru’s Grana y Montero (12 percent), Sonatrach (10 percent) and SK Corp (9.6 percent).
The six-company consortium will invest $1.45bn and will construct two pipelines to transport gas and liquids from the Ucayali Basin across the Andes mountains to Lima and Callao on Peru’s Pacific seaboard – a distance of around 700km.
Algeria’s Minister of Energy and Mines Chakib Khelil said on 25 October that Sonatrach would contribute $69mn of the $695mn needed to cover the construction costs of the transport facilities, of which $15mn would come from its own resources and the remainder from fees for its engineering services.
Mr Khelil said that Sonatrach is expected to act as an engineering advisor to the consortium on the project and that the Algerian firm was also discussing participation in the field’s development (MEES, 30 October).