Peru declares new natural gas emergency amid continuing blockades

Peru’s energy and mines ministry has declared a natural gas supply emergency for the Concesión Norte distribution system.

The contingency will remain in place until conditions allow for the passage of LNG-laden trucks, said the ministry, which recently declared the end of a gas supply emergency for the Norte and Concesión Sur Oeste systems.

Gases del Pacífico (GDP), which holds the Norte concession, requested the declaration of the new emergency due to blockades on the Panamerican highway and alternate routes.

Blockades and protests have continued following the ousting of former president Pedro Castillo.

The trucks that supply GDP, also known as Quavii and controlled by Colombia’s Promigas, travel to the north of the country from Peru LNG’s Pampa Melchorita plant, south of Lima.

Under the emergency, GDP may cut supply to industrial clients to guarantee delivery to residential and commercial customers.

Earlier this month, the ministry declared a new emergency for the Sur Oeste concession, which is operated by national oil company Petroperú and also receives LNG trucked from Pampa Melchorita.

In addition, scheduled maintenance and unexpected downtime at Pampa Melchorita have impacted gas dispatch.

The logistical impasse brings to the fore cost, efficiency, reliability, and security challenges posed by having to truck LNG long distances which, in the case of Quavii, requires trucks to travel 1,900km.

Options that have been pitched include the construction of coastal pipelines and the use of cabotage vessels.

To address the cost concerns of stakeholders, particularly those related to higher rates for users in regions versus Lima and Callao, the government introduced legislation in November 2021 that envisions the establishment of a flat nationwide tariff.

The bill, available here, in Spanish, continues at the committee level.