Hunt
announces progress on LNG project in Peru
Posted: 1 October 2003
Hunt Oil Company of Dallas, Texas, announced today that a Letter
Agreement has been signed to purchase excess natural gas from the
Camisea fields in Peru to be used in a proposed LNG export project
to be built on the Pacific coast of Peru.
Additionally, Hunt Oil announced that a Memorandum of Understanding
has been signed for the sale of 2.7 million metric tons of LNG per
year from that proposed plant to Tractebel LNG, which intends to
utilize the LNG to meet its market needs in Mexico.
Ray L. Hunt, Chairman of Hunt Oil Company, said, “We are
very pleased to announce these purchase and sales agreements today,
which signifies that significant progress has now been made in the
‘pre-launch’ phase of the Peru LNG project.”
The announcements occurred at the Presidential Palace in Lima with
President Alejandro Toledo attending, along with members of his
cabinet. Heads of companies attending, in addition to Mr. Hunt,
were Mr. Dirk Beeuwsaert, Chief Executive Officer of Tractebel Electricity
& Gas International, and Mr. Luis Rey, President of Pluspetrol.
The company said that negotiations with the upstream consortium
of the Camisea Project, led by Pluspetrol, have resulted in a Letter
Agreement to sell excess gas from the Camisea fields to the proposed
LNG liquefaction plant, which will be built by the PERU LNG Company.
Hunt Oil Company will be the operator of the Peru LNG project.
A more definitive gas supply agreement is expected to be completed
by the end of 2003.
At the same time, the company said that a Memorandum of Understanding
has been signed between Tractebel LNG of Belgium and PERU LNG Company
for Tractebel LNG to purchase 2.7 million metric tons of LNG each
year.
A definitive LNG sales agreement finalizing this arrangement is
also targeted for the end of 2003. The operating company for the
LNG project, PERU LNG Company, has been formed. PERU LNG Company
plans to build a liquefaction plant located 169 km south of Lima,
Peru.
The plant will produce approximately 4.4 million metric tons of
LNG per year and is designed for future expansion in order to accommodate
additional new discoveries of excess gas in Peru, as well as to
receive possible imports of natural gas from neighboring countries.
The company said the location of the LNG plant at Pampa Melchorita
had been carefully selected after extensive environmental review.
An Environmental Impact Study was submitted to the government of
Peru on July 30, 2003, and public hearings have been scheduled.
Mr. Hunt said, “We are now preparing to enter a new phase
of the PERU LNG Company project, which will finalize the ownership
arrangements of the company and which also will initiate the LNG
project’s financing objectives. We have every reason to believe
that, based upon the LNG purchase and sales agreements we announced
today, project financing will be obtained in a timely manner.”
The company said that once it has obtained commitments for project
financing, the final phase of the project — construction and
completion of the LNG liquefaction plant and associated infrastructure
in Peru — would begin, and first product delivery would occur
in late 2007 or early 2008.
The company said the proposed PERU LNG Company liquefaction plant
would have significant economic advantages by being first in the
marketplace for export of LNG from the Pacific coast of South America.
Mr. Hunt said that the PERU LNG company is currently in negotiations
with other potential buyers for the remaining LNG volumes that will
be available from the Peru LNG facility.
Hunt Oil Company is one of the largest privately held exploration
and production companies in the world, is based in Dallas, Texas,
and is directed by Ray L. Hunt.
In the international oil and gas exploration area, Hunt and its
subsidiaries are active worldwide in countries such as Peru, Canada,
Oman, Togo, Yemen, onshore United States, and U.S. Gulf of Mexico
offshore.
Hunt is the operator of Yemen’s Marib and Jannah blocks,
which have produced more than 940 million barrels of oil. Hunt has
drilled more than 600 development and exploratory wells in Yemen,
and discovered 11 trillion cubic feet of natural gas. In addition
to the discoveries, Yemen Hunt’s Central Production Unit separates
gas from oil and four natural gas processing plants extract liquid
hydrocarbons from 1.7 billion cubic feet of natural gas per day.
The company constructed and maintains a 263 mile export pipeline,
built through rugged desert and mountain terrain.
A four hundred thousand ton (3 million barrel) converter tanker
serves as one of the world’s largest stationary floating storage
and offloading facilities.
PERU LNG Company is the commercial entity responsible for negotiating
the development of an LNG project which will utilize gas from the
Camisea fields in Peru. Equity investors are currently comprised
of Hunt Oil Company of Dallas, Texas, and SK Corporation of South
Korea.
Other equity participants in PERU LNG Company will be announced
in the near term. Tractebel LNG is based in London and is a business
unit of Tractebel Electricity & Gas International. It operates
worldwide, leading the company’s expansion of LNG supply activities
focusing on both Atlantic and Pacific markets.
It is a business division of SUEZ. Tractebel LNG manages Tractebel's
equity stake in the Atlantic LNG facility in Point Fortin, Trinidad,
and actively promotes LNG supply projects into Atlantic Basin markets
in both the U.S. and Europe.
Tractebel LNG also acts as a short-term deal-maker, currently operating
two LNG carriers, the Hoegh Galleon and Excalibur. Tractebel LNG
has recently delivered cargoes into North America, Korea, Spain
and Japan.
Posted by Richard Price,
Editor Pipeline Magazine
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