(Argus, 24.May.2021) — One of Peru’s top natural gas distributors is rationing supply and exploring options after the early May outage of the Peru LNG liquefaction complex on which it relies.
Gases del Pacifico-Quavii, a subsidiary of Colombia’s Promigas, lost supply around 7 May when a compressor broke down at Peru LNG. Operated by Dallas-based Hunt Oil, the 4.4mn t/yr complex will likely be closed until at least the end of May.
Peru’s energy ministry on 13 May published emergency measures, including authorization of LNG imports for 60 days, to help deal with the crisis.
Promigas Peru chief executive Miguel Maal told Argus his company is taking steps to ensure supply to 135,000 households it services in seven northern cities. The company was receiving 7.12mn cf/d of LNG in cryogenic tankers from Peru LNG prior to the outage, but demand nearly doubles in June with the onset of winter.
“We have implemented supply rationing for sectors with the highest levels of gas consumption. In order to mitigate the impacts of this situation, which is outside of our control, we have activated a contingency plan that prioritizes service to households as stipulated by the government’s emergency decree,” said Maal.
The company also supplies 200 businesses, 41 industries and two service stations for vehicles in the seven cities under the contract.
Maal said the company is considering importing LNG from Chile or Ecuador. While Ecuador is geographically closer, it has limited LNG experience. Chile’s 1.5mn t/yr GNL Mejillones terminal, controlled by France’s Engie, is relatively close to cities covered by state-owned PetroPeru in southern Peru, but it is nearly 2,950km (1,833mi) to Chiclayo, the northern-most city serviced by Gases del Pacifico-Quavii.
Industry sources told Argus last week that GNL Mejillones held preliminary talks with distributors in Peru after the outage.
Meanwhile, rationing has trimmed consumption in the Gases del Pacifico-Quaviito concession to just 2mn cf/d. “Our commitment is to guarantee continued service to households, and so far we have been able to do this thanks to the infrastructure in place,” said Maal.
PetroPeru, which assumed distribution to about 13,000 southern customers late last year after Spain’s Naturgy withdrew, declined to comment.
Two other distributors use piped gas directly from the Camisea fields in the southern jungle: Calidda, with 1.1mn customers in Lima, and Contugas, with 65,600 in Ica, directly south of Lima. Both are subsidiaries of Colombia’s Grupo Energia de Bogota (GEB).
Promigas subsidiary Gases del Norte de Peru, which recently started operating in the northern Piura region, receives feedstock from small onshore blocks.
Gas use policies are a key issue in Peru’s upcoming 6 June presidential runoff. Frontrunner Pedro Castillo of the far-left Peru Libre party pledges to prioritize expansion of domestic distribution over LNG exports. In a poll published on 23 May, Castillo led rightwing competitor Keiko Fujimori by more than 10 points.
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By Lucien Chauvin
