Abstract
Transportadora de Gas del Peru (TGP), which operates twin natural and
liquefied natural gas (LNG)
pipelines from the Camisea fields in the
central jungle to Peru’s coast was reported to be in discussions
with the government to more than double capacity. Both TGP and the government
have been criticised for
failing to predict how rapidly demand for gas
would rise, meaning that the existing pipelines, completed
only four years
ago in 2004, are now insufficient. Speaking to Dow Jones news agency TGP
general
manager Ricardo Ferreiro said the government had set relatively
low prices for natural gas and ‘this
created a strong incentive for
people to switch over to gas en masse, generating what is known today as
the congestion of the gas system’. Two improvement projects are under
way: a US$130mn capacity
increase for a compressor in Ayacucho and a
US$150mn loop along Peru’s coast. They are expected to
boost overall
pumping capacity to 450mn cubic feet per day (cfd), up from 314mn cfd at
present. Under
the terms of TGP’s original contract, the 460mn cfd
level was only due to be reached by 2015. Now,
however, both sides were
said to be discussing how to expand capacity further to 1bn cfd by building
a
new pipeline. Despite the global financial crisis, Ferreiro said
discussions would begin on possible
sources of funding for the new
pipeline.
Despite concern over inadequate infrastructure and an adverse
international economic climate, BMI’s
newly released Peru Freight
Transport Report remains bullish over freight prospects in the country,
highlighting the construction of the inter-oceanic highway connecting Peru to
Brazil, Pacific coast port
development; and the complex of natural gas
pipelines and LNG facilities associated with ongoing
development of the
Camisea deposits. These three projects underpin BMI’s view that Peruvian
freighttransport
turnover, measured in million-tonne-km (mntkm) will grow
by an annual average of 6.2% in
2009-2013. By value, the transport and
communications sector will grow to be worth US$2.7bn in 2012,
representing
8.6% of total GDP.
BMI’s view is that freight transport has a
critical role to play in Peru’s development over the next few
years.
Much will depend not only on the management of concrete projects, but also on
the quality of the
business environment in this sector. BMI gives Peru an
overall freight rating of 62.4, placing it in the
middling range relative
to its peers. There is room for improvement in infrastructure development and
the
regulatory environment. Among the risks facing our forecasts are
political uncertainty and the possibility
of further falls in the price of
Peru’s commodity exports, leading to downward revision of predicted
growth rates.
On balance, despite the possibility of turbulence in the
airfreight sector (traditionally volatile in recent
Peruvian experience),
and slower growth in rail freight, BMI is projecting an encouraging future for
the
country’s freight sector.
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