Peru slates Camisea tender for May

Peru will call a new tender for the world-class Camisea natural gas project in May.

A scheme proposed by units of Royal Dutch/Shell and Mobil Corp. to develop the fields in Peru's central southern jungle and market about 9 tcf of gas collapsed last year, over disagreements on gas prices, marketing/distribution, and other issues (OGJ, July 27, 1998, p. 20). The government disclosed last month that it would organize a new tender for the project this year (OGJ, Apr. 5, 1999, p. 34).

Peruvian President Alberto Fujimori, who made the latest tender announcement Apr. 12, added that there are financial and technical details to the tender that have yet to be defined.

The Camisea executive committee, however, has opened the possibility of a vertically integrated project-which some committee members previously had resisted-as the best system to attract investors.

Fujimori estimates that the project would cost $2 billion compared with more than $3 billion estimated by the Shell-Mobil consortium, although he did not give reasons for the difference.

Tender details

The Camisea committee will call two simultaneous tenders-one for production of the Camisea gas and the other for transportation and distribution to major customers, such as electricity generators and cement manufacturers to whom gas would be piped. Companies can bid in both tenders, but the contracts will be managed separately, Fujimori said.

The government's first proposals-after the Shell-Mobil consortium withdrew-was to offer four separate contracts-for production, transportation, distribution, and electricity generation.

Energy and Mines Minister Daniel Hokama said that bidders will be given up to 6 months in which to study the terms and resolve queries regarding the tender before placing bids. This means it will be almost yearend before the winners are selected.

The government will set a maximum price for production, transportation, and distribution, and companies that make the best offer below the ceiling price will win the contracts.

Hokama said that Shell and/or Mobil can take part in both tenders, noting that a bill is being evaluated in Peru's Congress to regulate gas transportation and distribution costs. Although the same companies can win both contracts, each will be treated as a separate business unit, Hokama said.

The government will also guarantee a minimum market for the Camisea gas. One of the options is to sign preliminary contracts with Peruvian thermoelectric power generators such as Etevensa, Edegel, and Electroperu, as well as export contracts.

Etevensa, which operates 500-MW diesel generators-that are used only during peak hours and emergencies because of the high fuel costs-had already signed a preliminary letter of intent with the Shell-Mobil consortium, although the companies were unable to define a price at that time.

Committee snafu

Decisions on the Camisea tender had been delayed in the Camisea executive committee-headed by Jorge Camet as Fujimori's personal representative-owing to serious differences among committee members.

Camet had originally expected to announce the Camisea privatization scheme in January and later in March, but was unable to reach a consensus within the committee, mainly with Minister Hokama.

President Fujimori held a 5-6 hr meeting with the committee Apr. 9, followed by another meeting 3 days later when he made the announcement that the tender will be called in May.