Peru LNG Terminal

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Peru LNG Terminal is an LNG export terminal in Ica, Peru.

Location

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Project Details

• Operator: Hunt LNG Operating Company S.A.C.
• Owner: Hunt Oil (50%), MidOcean Energy (20%), Shell (20%), Marubeni (10%)
• Parent: Hunt Oil (50%), MidOcean Energy (20%), Shell (20%), Marubeni (10%)
• Location: Pampa Melchorita, Lima, Ica, Peru
• Coordinates: -13.2451, -76.297 (exact)
• Cost: 3.8 billion USD
• Capacity: 4.45 mtpa
• Status: Operating
• Type: Export
• Start Year: 2010

Note: mtpa = million tonnes per year; bcfd = billion cubic feet per day

Background

Peru LNG Terminal is a LNG export terminal in Ica, Peru. The terminal is a joint venture of Hunt Oil Company of the US (50%), MidOcean Energy (20%), Shell (20%), and Marubeni Corporation of Japan. Spanish-owned Repsol and Korean-owned SK Earthon previously held 20% stakes in the terminal, but their shares were bought out, respectively, by Shell in 2013, and by MidOcean Energy in 2024.

The LNG terminal, located at Pampa Melchorita, is said to be Peru's largest-ever project funded by direct foreign investment. It is geared to export gas in excess of domestic demand to the global market.

The project began production in 2010 and was South America's first export LNG terminal. The terminal has a nominal capacity of 4.5 million tons of LNG per year and a processing capacity of 0.63 bcfd. The site consists of a maritime terminal from which LNG is shipped. The terminal receives fossil gas from Peru's Camisea fields via the company's own Peru LNG Gas Pipeline, which connects in Chiquintirca with TGP's Camisea Gas Pipeline. The site also contains two storage tanks with a capacity of 4.6 million cubic feet.

The total investment needed for the project was $3.8 billion. Of the $3.8 billion that financed the project, $2.25 billion came from third parties such as credit agencies, commercial banks, and multilateral institutions. Among the multilateral institutions, the US Export-Import Bank provided $450 million, the Inter-American Bank provided $400 million, the IFC $300 million, the Korean Export-Import Bank $300 million, and the Italy Sace Export Credit Agency $250 million. The Banco de Credito del Peru (BCP) also arranged for local bonds totaling upwards of $350 million.

The construction of the project was contracted out to CB&I (Chicago Bridge and Iron) and was engineered and designed by Gulf Interstate Engineering.

Gas Exports

The LNG terminal shipped 32 cargoes between January and June of 2017, compared with 31 over the same period in 2016. Most ships were destined for Spain, but three also landed in Mexico, two in both France and Japan, while Taiwan, the UK, and South Korea received one each. The company's revenue doubled year over year, from $151.4 million to $303.8 million. In 2016, 34 of the terminal's 71 cargoes were sent to Mexico. As the US expands its gas exports, Peru will look to increase its exports to Europe in order to compete.

Controversy

Former Energy Minister Carlos Herrera has publicly criticized the LNG export project. According to Herrera, Peru did not have enough gas supplies to warrant exporting it overseas. He argued that it was political corruption which allowed for the project to commence. There was an investigation into the matter and no evidence of corruption or mismanagement was found. Although there was no evidence found to support Herrera's claim, leaders from the Southern region in Peru complained that the export project would lead to shortages affecting domestic consumption.

In January 2016, exports from Peru's LNG export terminal were halted due to a rupture in the pipeline supplying it with gas from the Camisea gas fields.