Bob Williams
Executive Editor
LIMA, Nov. 6 -- The Camisea natural gas megaproject has the potential to spur a surge in gas exploration in Peru comparable to that seen in Bolivia following the development of the Bolivia-Brazil gas pipeline, according to the head of the company leading Camisea's upstream effort.
Luis Alberto Rey, president of Argentina's Pluspetrol SA, called for an "enormous exploration initiative in Peru, like that of Bolivia," during his keynote speech at Ingepet 2002, the fourth edition of the international upstream conference in Peru since its inception in 1993.
He also updated progress on the Camisea project, which had sat on the shelf since the first discoveries were made in Peru's southern jungle in the early 1980s by Royal Dutch/Shell Group, until a Dec. 9, 2000, agreement launched "the beginning of energy independence for Peru."
Pluspetrol heads the consortium operating the upstream concession for the Camisea megaproject. Another Argentine company, Techint SA, heads the group that operates the transportation concession, which delivers Camisea gas to Lima for power, industrial, and residential users. Belgium's Tractebel SA leads a third consortium for distribution of the gas in Lima.
Peru's gas potential
The Pluspetrol chief noted that the Bolivia-Brazil gas pipeline sparked a flurry of exploration and development in Bolivia that has yielded such vast gas reserves that the country is mulling an LNG export project to monetize gas discoveries that the export pipeline can't accommodate any time in the foreseeable future. He pegged Bolivian gas reserves at 50-60 tcf, up from a mere 4 tcf discovered prior to the development of the Bolivia-Brazil export pipeline.
Rey said that Peru's gas potential compares favorably with Bolivia's, with large underexplored basins such as the Ucayali (home to the Camisea gas fields) and Madre de Dios on trend with the world-class gas reservoirs found in neighboring Bolivia.
"Why can't we we also discover 50-60 tcf in Peru?" he asked rhetorically, placing that as the ultimate gas reserves potential in the country. The Camisea fields, San Martin and Cashiriari, hold combined (proved plus probable) reserves totaling 11 tcf of gas and 600 million bbl of condensate and natural gas liquids.
Given an aggressive effort by government and private industry to support gas utilization in Peru, Rey envisioned a growing gas grid within the country linking all communities with populations exceeding 5,000. He also cited a growing role for vehicular compressed natural gas along the lines of Argentina's effort, which has 800,000 CNG vehicles consuming 175 MMcfd of gas.
With Camisea fulfilling all projected domestic gas needs, the additional reserves to be discovered could support a growing role for Peru as a regional gas exporter, with possible gas pipelines laid directly to Brazil or indirectly via a link with Santa Cruz, Bolivia, the starting point for the Bolivia-Brazil gas line.
In addition to LNG export opportunities in Mexico and on the US West Coast, Peruvian gas could find a home in Brazil, considering that market's massive potential for gas demand growth from a base that represents a paltry 2-4% of the nation's energy mix, Rey added.
Camisea update, benefits
Rey offered this update of Camisea work to the Ingepet keynote luncheon audience:
-- All seismic work, including 800 sq km of 3D, has been completed.
-- The first well drilled, San Martin-1, will be tested in the next few days; the second San Martin well has been spudded and is expected to be completed by yearend. In a second stage, three more San Martin wells will be drilled, while the drilling program at Cashiriari will proceed "as a function of demand and the need for reinjection."
-- Gas compression, cryogenic gas processing, and liquids recovery facilities at the Las Malvinas production center are on track to be completed by the end of January.
-- Infield pipeline construction work will be 75% complete by yearend.
Rey noted that the schedule mandated by the concession contract calls for start of commercial operations by August 2004, but his company's own start-up target date is April 2004.
Among the benefits accruing to Peru from the Camisea project is a substantial reduction in the domestic cost of energy, Rey said. Beyond the oil imports that developing the domestic gas resource will supplant, he noted that "the installed cost of a hydropower project is triple that of a gas-based power project."
Rey added, "Camisea will make Peru's energy industry competitive on a worldwide basis."
Contact Bob Williams at [email protected].
