Peru opens Camisea gas plant near marine reserve
Date: 10-Aug-04
Country: PERU
Author: Marco Aquino
The government hopes the Camisea plant will kick start energy exports with sales of propane, butane and condensate, tapping into the Andean nation's huge gas reserves in the southern jungle, which began flowing this week.
Foreign Trade Minister Alfredo Ferrero said the plant at Paracas, some 190 miles (300 km) south of Lima, would generate annually $300 million in exports of propane and butane - which are combined to make Liquefied Petroleum Gas (LPG) for heating, cooking and industrial purposes - from 2005.
"This plant and the environment are not incompatible," Toledo told business leaders and ministers. "This beautiful region will see the benefits ... This plant will dynamize the regional economy and generate royalties for local government."
Peru aims to export natural gas to Mexico from 2008 or 2009 and eventually to the United States, as well as immediately converting industries and households to cheaper, cleaner Camisea gas, moving away from crude-based liquid fuels.
Peru hopes the $1.6 billion Camisea project will be the economic catalyst to help pull the Andean nation out of poverty and cut its dependence on expensive oil imports.
The government says Camisea will reduce electricity bills by 20 percent and slash companies' energy costs by up to 50 percent. It forecasts savings of $4.1 billion in energy costs from 2004 to 2033 as Peru reduces its hydrocarbons imports.
But environmentalists who lobbied for the plant to be built elsewhere warned the operations would harm the nearby Paracas nature reserve, a home to birds, rare penguins and sea lions.
"The main risk at Paracas will be from the rise in sea traffic, bringing ships and damaging the reserve's ecosystem," said Patricia Majluf, a Paracas specialist from the environmental group Spondylus. "With Camisea, Paracas won't be the same," she added.
Tour operators and hoteliers say the plant will mar the natural beauty of the Paracas bay and frighten away tourists.
"Right now we have a lot of visitors, but that number could fall when the plant goes into operation," said tour operator Luis Navarrete at the popular upmarket Hotel Paracas.
Argentina's third-biggest oil group, Pluspetrol, which leads the Camisea development consortium, says it will invest $23 million to monitor and conserve the marine reserve.
The Camisea consortium includes U.S. energy group Hunt Oil and SK Corp. (003600.KS: Quote, Profile, Research) of South Korea and Argentina's Techint. Techint is leading the transport consortium with Pluspetrol, Hunt, SK, Algeria's Sonatrach, Peruvian construction company Grana y Montero (GRA.LM: Quote, Profile, Research) and Tractebel, a unit of France's Suez (LYOE.PA: Quote, Profile, Research).
