PRESS RELEASE

Osinergmin approved the connection of 320 thousand new natural gas users in Lima and Callao

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Thursday, June 21, 2018

This press release from Osinergmin was published using an automatic translation system.

320 thousand homes and businesses in Lima and Callao will benefit from natural gas gradually within the next five years, after the Supervisory Body for Investment in Energy and Mining, Osinergmin, approved and published the Cáridda Five-Year Investment Plan for the period 2018 - 2022. This occurred after the completion of the regulatory process carried out by Osinergmin in a technical, autonomous and impartial manner; which included the participation of all stakeholders, such as companies, associations, user associations, and citizenship in general.

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Osinergmin said that the Five-Year Plan defines a minimum number of connections and areas of the city where the natural gas concessionaire in Lima and Callao must enable natural gas. For this, and in accordance with current regulations, Osinergmin considered the development of natural gas networks in 36 districts of Metropolitan Lima, prioritizing 29 of them, which mostly have users from the low, medium and low middle socioeconomic strata.

In this regard, the supervisory body detailed that Cálidda must comply with the Five-Year Plan and present the necessary justifications in case of not being able to execute networks in a defined area. In addition, the concession company may carry out works in areas other than those indicated in the plan, provided they are additional to the Five-Year Plan and are located in its concession area.

Transparent and participatory

Osinergmin indicated that its objective is to provide a stable regulatory framework that encourages investments and benefits users with safe and quality energy services; therefore, it carries out regulatory processes with technical criteria, and which are also transparent and participatory.

Thus, for the approval of the Quinquennial Plan 2018 - 2022, Distribution Tariff and Promotion Plan, Osinergmin held public hearings and received and evaluated proposals throughout the process. As a result, it incorporated 20 additional areas in the Five-Year Plan to those proposed by the concessionaire. These areas involve the connection of more than 36 thousand new users and 336 km of polyethylene pipelines in the districts of Ate, Carabayllo, Carmen de la Legua , Chaclacayo, Comas, El Agustino, Independencia, La Victoria, Rimac, San Juan de Lurigancho and Cercado de Lima.

Efficient massification

The addition of additional areas to the five-year plan corresponds to a technical decision made by the supervising body, who determined that, with an efficient investment, the concessionaire company can expand the number of connections it initially proposed.

In this regard, Osinergmin emphasized that the initial proposal of Cálidda considered 266 thousand users, while the approved Five Year Plan considers 320 thousand connections, that is to say 54 thousand more beneficiaries.

The Five-Year Plan represents an important advance in the process of massification of natural gas in the country, and thus provide an economic and safe fuel to more families, mainly those of lower strata. According to Osinergmin, upon completion of the Five Year Plan in the year 2022, approximately 800 thousand residential users of the low, medium-low and low strata will have natural gas connections. With this advance, it would be pending the connection of 280 thousand residential users to connect the one million families in Lima and Callao belonging to the aforementioned social strata.

Economical and safe fuel

Along with the Five-Year Plan, the supervisory body approved the single distribution rate, with which users can save up to 19 soles per month, when compared to the average cost of a gas balloon.

More data

As part of the regulatory process, Osinergmin has also determined a reduction in cutting and reconnection costs for domestic users, of 46% and 21% respectively.

On the other hand, has approved the expansion of the City Gate of Lurin, whose start of operations is expected for the year 2019. This will increase the capacity of the City Gate by 150 000 m3 / h and thus ensure the continuity of natural gas supply for the future regulated customers (residential, commercial and industrial) that access the service.