Co Working on Peru's Camisea Gas Confident of IDB Loan | Amazon Watch
Amazon Watch

Co Working on Peru’s Camisea Gas Confident of IDB Loan

December 3, 2002 | Virginia Rey-Sanchez, peru@dowjones.com | Dow Jones

Lima, Peru – The company developing a pipeline to transport natural gas from the Camisea project in Peru said Tuesday it is confident that the Inter-American Development Bank will approve a loan despite criticism from environmental groups.

A mission from the IDB and the Andean Community’s development agency, or CAF, is carrying out “due diligence” before deciding whether to give a $125 million loan to help finance the project.

“We are certain that the IDB will end up supporting the project,” Transportadora de Gas del Peru SA President Ricardo Markous said in a press conference.

The company is managed by Techint SA, which leads the consortium developing the transportation section of the Camisea project.

Markous said that if the IDB approves the loan, the CAF will do the same.

He forecast that this will take place at the latest by the start of January with the disbursement taking place in the first quarter of next year.

Environmental groups say the pipeline will damage rain forests near the project in southern Peru where indigenous peoples still live in isolation.

“In the hypothetical case the IDB loan isn’t given, although we believe that it will, we would finish the project with our own resources,” Markous said.

He added that the company could raise between $100 million to $200 million in the local market and another $110 million outside of Peru.

Officials said they expect that a different IDB loan, worth some $8 million, will be approved this week. That will be given to the Peruvian government to use in monitoring environmental issues raised by the Camisea project.

In early November a Peruvian government regulatory agency fined Transportadora de Gas del Peru SA $1.0 million, saying it had damaged the environment while building the pipeline.

Markous said the company has appealed that fine.

Techint, Algeria’s Sonatrach, Peru’s Grana y Montero, and Belgium’s Tractebel SA (B.TRB), which is part of the Suez group , make up a consortium working to transport and distribute natural gas from Camisea.

Argentina’s Pluspetrol SA, U.S.-based Hunt Oil Co. and Korea’s SK Group (Q.SKG) are also part of that consortium. Those three companies are also developing the upstream portion of the project.

Company officials are confident that gas from Camisea will arrive in Lima in 2004.

The $1.35 billion Camisea project has proven gas reserves of 13 trillion cubic feet, and associated liquids of about 600 million barrels, according to government estimates.

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