August 4, 2008

Peru to Pick Operators for Gas Pipelines Soon


Peru plans to choose the operators of two natural-gas pipelines in September as it tries to boost gas consumption and reduce the Andean country's dependence on crude oil imports, President Alan Garcia says.

The Energy & Mines Ministry will pick operators for a 675-mile pipeline to the south coast from the southern jungle Camisea gas fields, and to the northern coastal port of Chimbote from Lima, Garcia said in his annual state-of-the-nation speech to Congress this week in Lima.

"The massive use of gas will make us more independent of the oil dictatorship," Garcia said. "The Southern Highland pipeline will soon run through the cities of Cuzco, Arequipa and Ilo, with links to the cities of Puno and Tacna."

Energy Transfer Partners LP of Dallas and the investment fund Conduit Capital Partners LLC of New York have fielded competing bids to build a $1.35 billion pipeline through the southern Andes, while a second line would supply fish meal and power plants on Peru's north coast.

The project is part of $6 billion in energy investment commitments expected over the next four years, including a $3.8 billion gas export project being built by Hunt Oil Co. of Dallas.

Garcia said investment in power plants and transmission lines will boost installed capacity to 7,283 megawatts by mid-2009 from this year's 6,152 megawatts.

Peru's exports are slated to rise by 20 percent to $33 billion this year on surging sales of copper, gold, natural gas and fish meal, he said.

Mining and oil tax revenue will enable the government to triple public spending in provinces to $6.4 billion this year from 2005, he said.

Originally published by ALEX EMERY Bloomberg News.

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