Peru's New LNG Project

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Researched by Industrial Info Resources (Sugar Land, Texas). Peru’ s Ministry of Energy has launched the Perú LNG project, which is in the hands of the Peruvian registered consortium Perú LNG that was created in 2003 with the purpose of developing the country’s abundant natural gas reserves for export to the west coast of North America. This corporation is majority owned and directed by Hunt Oil Company (Dallas, Texas) (50%); the South Korean energy and chemical affiliate of SK Group, SK Corporation (30%) and the Spanish Repsol YPF (20%) are the other participating owners. It is set to be one of the most important resources of the government’s future energy strategy and will be one of the largest industrial projects to be undertaken in Peru. The total investment, development and financing costs are estimated at $3.8 billion. The facilities to be constructed will include a natural gas pipeline to transport feed gas, an LNG Plant at Pampa Melchorita ($1.5 billion), the marine export facilities and an ocean breakwater.

A major element of the project is the construction of a 408 kilometers LNG pipeline, which will generate around $800 million in annual exports and increase the country’s total export by a 1.5%. The 34-inches trunk pipeline, which will be connected to the already existing TPG, Transportadora de Gas del Perú, pipeline and will run through 22 districts (nine in Ayacucho, four in Huancavelica, eight in Ica and one in Lima). It will transport 667 million cubic meters per day of natural gas from Ayacucho department to the future liquefied gas plant located in Pampa Melchorita. These processing and export facilities are situated 168 kilometers south of Lima, Peru, and will be a single trained with a capacity of 4.4 million metric tons a year. It will be able to feed gas receiving, liquid separation, gas metering and pressure reduction, removal of carbon dioxide and water from the feed gas. The equipment and utilities will include gas dehydration and carbon absorption units, facilities for refrigeration and liquefaction, LNG and refrigerant storage.

The Inter-American Development Bank, with which Peru LNG has signed an $800 million mandate letter in July 2006, is one of the varied sources that will finance the project that will generate 35,000 direct and indirect jobs during the construction phase, which is expected to be completed within four years. The Engineering, Procurement and Construction (EPC) contract for the project was awarded to the Chicago Bridge & Iron Company NV (CB&I).

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