Natural gas coverage in Peru advanced to 14% in the last year

This is an automated translation of the original Promigas release published in Spanish.

Lima, October 13, 2021.- The number of natural gas customers in Peru reached 1,555,620 at the end of 2021, an increase of 25% compared to 1,244,172 in 2020. More than 311,000 new families were connected during the last year, which represents that about 1,153,000 Peruvians were benefited.

With this result, natural gas coverage at the national level rose to 14%, two percentage points above the previous year, according to the VII edition of the Report on the Natural Gas Sector in Peru presented by Promigas.

The growth was driven by the residential and commercial sectors, which totaled 1,554,336 clients last year, a year-on-year advance of 25%. While, industrial customers rose to 893 (+6%); Natural Gas Vehicle service stations, 344 (+2%); and power generators, to 47 (+9%).

In these 2021 results, the performance of the Lima concessions, which reached 1,300,122 clients, played an important role; in teh north, which reached 169,601 clients in the departments of Áncash, Lambayeque, La Libertad and Cajamarca; and in Ica, with 69,150 clients. Also, in Piura, which started its operation early last year, and closed with 3,685 clients.

“In the last five years, close to 1 million customers were connected to the natural gas service, that is, 3.7 million Peruvians from the residential and commercial sectors, thus contributing to the reduction of energy poverty in the country. The effective coverage of this service in Peru rose 8 points, reaching 14%. During this period, natural gas was brought to 8 new departments: 5 in the north and 3 in the southwest, through 3 new distribution concessions: North, Southwest and Piura,” said Juan Manuel Rojas, President of Promigas.

Likewise, according to the report, the consumption of natural gas in the domestic market rose to 673 million cubic feet per day (MCFD), 21.3% higher than the 555 million in 2020. The advance was explained –mainly– by the consumption of electricity generators, which reached 419 MCFD. This figure meant 62% of the total consumption of the domestic market in 2021 and, in addition, was higher by 16% compared to the consumption of generators in 2020.

For its part, the industrial sector consumed 169 MCFD of natural gas (+35%); the Natural Gas Vehicle segment, 60 MCFD (+27%); and the residential and commercial sectors, 25 MCFD (+10%).

Challenges for overcrowding

In order to accelerate the spread of Natural Gas, the report recommended adopting a series of measures such as the implementation of a levelized rate throughout the country, which applies to all concessions.

He pointed out that this initiative aims to improve the rates for natural gas customers "in such a way that the execution of large-scale distribution networks that serve a greater number of residential customers becomes viable." The new networks would be financed with payments made for commercial and industrial consumption.

In addition, regarding investments in exploration and production, it is considered essential to approve regulations that extend the current contracts of the private sector, in order to give continuity to their operations and, in this way, guarantee new supplies of natural gas.

On the other hand, it is proposed to eliminate subsidies for fossil fuels such as LPG.

The report reiterated the importance and need to expand the resources of the Energy Social Inclusion Fund (FISE), which confirmed to be a fundamental ally in the massification of natural gas during 2021, by materializing 824,794 home connections executed throughout the country thanks to your BonoGas program.

Natural gas, an ally of the energy transition

Finally, the report brings to the fore the importance of continuing a responsible energy transition process in Peru, because –it points out– our territory has already been suffering, for some time, the consequences of climatic changes. "Peru is the third country most vulnerable to climate change. In the last 30 years, 22% of the surface of its glaciers has been lost, which is 71% of the existing tropical glaciers in the world," he warned.

Around this point, it is indicated that Peru should bet on natural gas, because it is a key ally in the energy transition process, since it is the energy that generates the least greenhouse gases (GHG) to the planet. "Among its main advantages are: lower CO2 emissions, and that it does not emit solid particles that pollute the air.