The Camisea Gas Project extracts and transports

natural gas Natural gas (also called fossil gas or simply gas) is a naturally occurring mixture of gaseous hydrocarbons consisting primarily of methane in addition to various smaller amounts of other higher alkanes. Low levels of trace gases like carbo ...

originating near the

Urubamba River The Urubamba River or Vilcamayo River (possibly from Quechua ''Willkamayu'', for "sacred river") is a river in Peru. Upstream it is called Vilcanota River (possibly from Aymara ''Willkanuta'', for "house of the sun"). Within the La Convención Pr ...

Megantoni District, La Convención Province Megantoni District is one of fourteen districts of La Convención Province in the Cusco Region of Peru. Megantoni occupies the northernmost part of La Convención. The district was created in 2016 from land previously belonging to Echarate Distric ...

in the

Cusco Region Cusco, also spelled Cuzco (; qu, Qusqu suyu ), is a department and region in Peru and is the fourth largest department in the country, after Madre de Dios, Ucayali, and Loreto. It borders the departments of Ucayali on the north; Madre de D ...

of Peru. The project, which cost nearly four billion dollars by 2015, developed in a remote, forested region of the

Amazon Basin The Amazon basin is the part of South America drained by the Amazon River and its tributaries. The Amazon drainage basin covers an area of about , or about 35.5 percent of the South American continent. It is located in the countries of Bolivi ...

which has a population of mostly

Indigenous people Indigenous peoples are culturally distinct ethnic groups whose members are directly descended from the earliest known inhabitants of a particular geographic region and, to some extent, maintain the language and culture of those original people ...

History

In July 1981 the Peruvian government signed an oil contract for blocks 38 and 42 with

Royal Dutch Shell Shell plc is a British multinational oil and gas company headquartered in London, England. Shell is a public limited company with a primary listing on the London Stock Exchange (LSE) and secondary listings on Euronext Amsterdam and the New Yo ...

. The contract covered approximately in the southern part of the Ucayali Basin. The Camisea gas fields were discovered in 1986 by Shell. By 1987, two non-associated natural gas fields, San Martín and Cashiriari, were approved economically feasible. In March 1988, the preliminary agreement on exploration was signed between

Petroperú Petróleos del Perú (Petroperú) ( en, Petroleum of Peru), is a Peruvian state-owned company and private law dedicated to the transportation, refining, distribution and commercialization of fuels and other petroleum products. This company belong ...

and Shell. However, the talks ended in August of that year without reaching a final agreement. Shell and Petroperú signed the agreement for the assessment and development of the Camisea fields in March 1994. A consortium of Shell and

Mobil Mobil is a petroleum brand owned and operated by American oil and gas corporation ExxonMobil. The brand was formerly owned and operated by an oil and gas corporation of the same name, which itself merged with Exxon to form ExxonMobil in 1999. ...

started to develop the fields, but cancelled all projects in Peru in July 1998, due to political concerns. Six drilled wells and facilities went to the Peruvian State. For this reason, in May 1999, the Commission for the Promotion of Private Investment agrees to conduct a promotional process to develop the Camisea project through a scheme involving independent modules segmented business. In 1999, it adopted the Law No. 27133 with an assured supply of the domestic market by a "permanent horizon of 20 years." In late May 1999, the Special Committee of Camisea Project (CECAM) convened two international public tender for awarding the contract for the exploitation of Camisea, concessions and transport of liquids and gas from these fields to the coast and gas distribution in

Lima Lima ( ; ), originally founded as Ciudad de Los Reyes (City of The Kings) is the capital and the largest city of Peru. It is located in the valleys of the Chillón River, Chillón, Rímac River, Rímac and Lurín Rivers, in the desert zone of t ...

and

Callao Callao () is a Peruvian seaside city and Regions of Peru, region on the Pacific Ocean in the Lima metropolitan area. Callao is Peru's chief seaport and home to its main airport, Jorge Chávez International Airport. Callao municipality consists o ...

. In December 2000, contracts were signed for the project development with an international consortium which now includes of Pluspetrol (27.2%),

Hunt Oil Company Hunt Oil Co. is an independent oil and gas company headquartered in Dallas, Texas. It conducts its main oil production activities in the United States, Canada and, as of 1984, in Yemen. In the past, the company was owned by american oil tycoon ...

(25.2%)

SK Corporation SK Group (Korean: SK그룹, 에스케이그룹) is the second largest South Korean chaebol behind Samsung Group. SK Group is composed of 186 subsidiaries and affiliates that share the SK brand name and the group's management culture, named SKMS ...

(17.6%), Repsol YPF (10%), Tecpetrol (10%), and Sonatrach (10%). The key legal advisors in the transaction were Jaime Malagón, Jerome Jakubik, Paul Slocomb, and Víctor M. Marroquín of

Baker & McKenzie Baker McKenzie is an international law firm located in Chicago, Illinois. It was founded in 1949, originally named Baker & McKenzie. It now has 77 offices in 46 countries. It employs 4,809 attorneys total, and approximately 13,000 employees tot ...

, the international law firm retained by the Peruvian Government to advise on all privatization processes. In early May 2002, signed the concession contract for the transportation and distribution of gas from Camisea. In 2003 promulgating the DS 031-MS, eliminating the phrase "permanent horizon of 20 years" of Law No. 27133 and replacing it with "a minimum period specified in the contract." In June 2005 approving the Law 28 552, which amends Law 27133, disappears the phrase "permanent horizon of 20 years" and instead supply guarantees are mentioned in general terms. This made possible to allocate 100% of the Block 56 reserves for export. Since the Block 56 was not sufficient for export commitment again make the policy changes necessary to also dispose of Lot 88, for the domestic market. In December 2005 promulgating the 2005 EM 050 DS. In the preamble to the DS was explicitly stated that having the Act amended 28552 Article 4 of Law 27133 in relation to supplying the domestic market, authorizing Perupetro to renegotiate the contract for Block 88 to allow its proven reserves are exported. The development plan was carried out under the government of President

Alejandro Toledo Alejandro Celestino Toledo Manrique (; born 28 March 1946) is a Peruvian politician who served President of Peru, from 2001 to 2006. He gained international prominence after leading the opposition against president Alberto Fujimori, who held ...

and the gas fields became operational in August 2004.

Gas fields

The gas fields are located in Ucayali Basin. According to data verified by the international energy consulting firm

Gaffney, Cline & Associates Peter Gaffney and Ben Cline, both petroleum engineers working in oil and gas in South America, found they both shared a dream to have their own consultancy. They believed that the oil and gas industry could benefit from independent technical and man ...

, the Camisea gas fields contain about of natural gas and of

natural gas liquids Natural-gas condensate, also called natural gas liquids, is a low-density mixture of hydrocarbon liquids that are present as gaseous components in the raw natural gas produced from many natural gas fields. Some gas species within the raw natur ...

Pipelines

Two pipelines carry natural gas from the Camisea gas fields. The Camisea pipeline traverses through the steep

Andes The Andes, Andes Mountains or Andean Mountains (; ) are the longest continental mountain range in the world, forming a continuous highland along the western edge of South America. The range is long, wide (widest between 18°S – 20°S ...

mountains, and terminates within the

Paracas National Reservation Paracas National Reserve is a protected area located in the region of Ica, Peru and protects desert and marine ecosystems for their conservation and sustainable use. There are also archaeological remains of the Paracas culture inside the reserve. ...

(

Ica Region Ica (; qu, Ika) is a department and region of Peru. It borders the Pacific Ocean on the west; the Lima Region on the north; the Huancavelica and Ayacucho regions on the east; and the Arequipa Region on the south. Its capital is the city of Ic ...

) at the

Pisco Pisco is a colorless or yellowish-to-amber colored brandy produced in winemaking regions of Peru and Chile. Made by distilling fermented grape juice into a high-proof spirit, it was developed by 16th-century Spanish settlers as an alternative ...

terminal. It passes through the Malvinas plant, where

liquefied petroleum gas Liquefied petroleum gas (LPG or LP gas) is a fuel gas which contains a flammable mixture of hydrocarbon gases, specifically propane, propylene, butylene, isobutane and n-butane. LPG is used as a fuel gas in heating appliances, cooking e ...

(

propane Propane () is a three-carbon alkane with the molecular formula . It is a gas at standard temperature and pressure, but compressible to a transportable liquid. A by-product of natural gas processing and petroleum refining, it is commonly used a ...

and heavier liquids) is separated from natural gas. The pipeline has capacity of . The second natural gas pipeline runs from Malvinas along the coast to

and

for distribution to residents and industries in the capital city. LPG is exported through the Pisco terminal. This pipeline system is operated by Transportadora de Gas Peruano, a consortium of Tecgas, Pluspetrol, Hunt Oil Company, SK Corporation, Sonatrach and Grana y Montero. In April 2007, Suez Energy and Kuntur Gas Transport unveiled rival proposals for pipelines to carry Camisea gas to southern Peru.

Controversy

Law 27133 was amended by Supreme Decree 050-2005, 006-2006 and 031-2004, both given by the Ministry of Energy and Mines. Those rules were signed by

, Pedro Pablo Kuczynski and Jaime Quijandria. This conduct would be unconstitutional because the President would have issued a Supreme Decree (No. 050-2005 and 006-2006) in open distortion of the law (Law 27,133), thus violating Article 118 (paragraph 8) of the Constitution, rule setting corresponding to the president, exercising the power of regulating laws without violating or distorting. For the above irregularities are accused former officials of the crimes of extortion, collusion, unfair and abuse of authority. Under Article 384 of the Criminal Code sets out the demand-MEM-which makes the proper functional performance of public officials, is to ensure that interests of the State ", but" the conduct of former president and former minister (Clodomiro Sanchez) to allow modification of operation contracts for Block 88 that rule violated the Criminal Code. Under Article 376 of the Penal Code, abusive behavior is to violate the normative basis using the position that the subject (official) supports. This is arbitrary distorting an Act (27 133) through a Supreme Decree (050-2005 and 006-2006). As of March 2006 there had been five spills along the pipeline. The latest one occurred on 4 March 2006, resulting in three injuries. The UN has called for the "immediate suspension" of any plans to expand the Camisea Gas project, due to the high likelihood that by further intrusion into the Nahua-Nanti Reserve, several uncontacted and isolated tribes who live in the territory could be placed at risk of disease and death, as well as extreme scarcity brought on by disruption to game animals. The territory also serves as a buffer zone for Manu National Park, considered by UNESCO to be "the most biodiverse place on earth." Despite these concerns, an independent panel established by the Ex-Im Bank of the United States concluded, after five years of multi-disciplinary research, that the Camisea project has adhered to high environmental and social standards, and that its economic impact has been fundamental for Peru's economic growth.

References

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External links