Natural gas would reach more than 305,000 new homes in 2023

The Ministry of Energy and Mines (Minem) has raised its forecast for the mass use of domestic natural gas to 305,678 homes for the period 2023. For this purpose, the Executive evaluates a new supplementary credit of up to S/350 million from the Ministry of Economy and Finance (MEF), which would add to the S/491 million already injected through the Con Punche Peru Plan.

With this, in addition, the authority estimates that almost 2,000 kilometers of natural gas pipelines could be reached nationwide, much higher than the little more than 1,000 announced just a few weeks ago.

What is the previous scenario? According to the General Directorate of Hydrocarbons (DGH) of the Minem2022 concluded with a total of 1 million 814,685 homes connected to the residential natural gas service, since the long massification process began in our country.

These users are distributed in Lima, Callao, Ica, Ancash, La Libertad, Lambayeque, Cajamarca, Arequipa, Moquegua, Tacna and Piura. The contributions of the subsidies by the State have been fundamental for this slogan: of the aforementioned total, 1 million 118,079 are beneficiaries of the BonoGas Program of the Energy Social Inclusion Fund (FISE).

Precisely, the general director of Hydrocarbons, Carlo De Los Santos, mentions that the implementation of the Con Punche Peru Plan has allowed diversifying the sources of income for FISE, a program now also intended to contribute to the laying of pipelines throughout the territory, but which had become unbalanced after the global fuel crisis of 2022.

Previously, FISE could only receive resources from companies identified as large consumers of electricity or natural gas, as well as importers and producers of liquid hydrocarbon fuels. Under this new scheme, it has been strengthened with direct contributions from the treasury.

“With Punche, Peru makes caveats so that we can provide resources to FISE without the need for any additional law. We are evaluating an additional S/350 million, through a policy of supplementary credits, for more connections. It is still a proposal, but in any case we will reach more than 300,000 users in 2023. We are going to spread what nobody has done in recent years,” De Los Santos told The Republic.

Resources to massify

By 2023, the Minem works to promote the massification of gas through three different budgets: from FISE, of the Con Punche Peru plan and by bill. The latter involves the potential injection of an additional S/350 million.

In the case of FISE, there is a total budget of S/722.6 million for residential natural gas, through the BonoGas Program, and conversion of vehicles to CNG through the GNV Savings Program. In this projection, it is expected to bring the vital resource for industrialization and economic reactivation to 4,870 mypes which, added to those that were pending liquidation in 2022, reach 8,376 micro-enterprises that will be able to enjoy cleaner and cheaper fuel in the next ten months.

With the FISE, the Cálidda concession, in Lima and Callao, will receive 154,000 home connections; that of Contugás, in Ica, 10,000; that of Quavii, in Lambayeque, La Libertad, Cajamarca and Áncash, 25,000; the one that Petroperú has by order in Arequipa, Moquegua and Tacna, 9,500; and that of Gasnorp, in Piura, 6,560. The BonoGas is also expected to favor the construction of more than 317 kilometers of pipelines.

A three way valve

Similar panorama with the resources of the Con Punche Peru plan, which will grant the overcrowding a budget of S/491 million for 2023, assigned through DU-002-2023. In detail, it is expected to carry 20,544 residential supplies in Lima and Callao; 35,758 in Lambayeque, La Libertad, Cajamarca and Ancash; 3,300 in Arequipa, Moquegua and Tacna; and 9,590 in Piura. A global expense of S/161 million 617,800 with this document.

Where the contributions of this MEF program stand out is in the laying of pipelines, since it expects to contribute more than 1,098 kilometers for S/329 million 497,200. Only in the capital is it expected to advance on the districts of Lurigancho, Ancón, Carabayllo, Cieneguilla, San Juan de Lurigancho, Pachacámac, Comas, Puente Piedra, La Victoria, San Vicente de Cañete, Imperial, Callao and Ventanilla.

A wise decision for Gustavo Navarro, director of Gas Energy in Peru, who maintains that bringing this resource to families is crucial after three major moments of crisis for the country’s economy and energy security: the pandemic, the war between Russia and Ukraine, and the social upheaval against the government of President Dina Boluarte.

In this sense, Navarro explains that, in the world, the construction of energy infrastructure is carried out by the State, to be later managed through mixed operations with private companies, in most cases. This is the case in Colombia, Argentina and Bolivia and, of course, Europe.

“Colombia became massive under this model, and it could be said that, thanks to this experience gained, today all the gas concessionaires in Peru are Colombian,” he stressed.

Government will invest S/491 million to accelerate the massification of natural gas. Photo: diffusion

MEF has the last word

Finally, there are the S / 350 million that would arrive, soon, by supplementary credit to Minem, a procedure that must pass through the filter of Minister Alex Contreras. With these resources, new gas expansion devices are expected to be put into operation, within the framework of the Bill for New NG and LPG Supplies.

How many families would it benefit? It is expected that there will be 25,200 new residential supplies in 2023, of which 10,000, almost half, would be focused on Arequipa, Moquegua and Tacna, regions long affected by the cut in roads for access to petroleum derivatives, such as kitchen balls. of LPG. In addition, there will be 505 kilometers of pipelines, of which 250 will be in this southern concession. Not only that, since it is also planned to invest S/7 million 581,250 to connect 10 hospitals throughout the territory with natural gas, of which 5 are in the capital.

If it materializes, the massification would culminate in 2023 with 2 million 120,363 connected Peruvian households, but everything is in the hands of the MEF, which today faces attacks from different fronts that put the country’s revenue at risk, and with it, the implementation of projects like this.

Massification: slow process in Peru

Both the resources of Con Punche Perú and those of FISE are concentrated at the level of residential connections in the Quavii concession. On the other hand, the new credit that the Executive is studying will focus on the south.

Recently, the minister Oscar Vera Gargurevich, head of Minem, assured that his portfolio is working on the continuation of the Southern Gas Pipeline project. For this purpose, he indicated that there are many private companies interested in participating in the process.

LPG, which is not the same as natural gas, is still an alternative for many homes. For this reason, Minem delivers monthly purchase vouchers of S/25 in favor of 946,000 families. In Cusco, Piura, Tumbes and Ucayali, this voucher reaches S/43 and S/63.

Connections could be doubled

Approach. Amadeo Arrarte, partner & country manager of Calden Consulting

The massification of natural gas has been developing with difficulty. In Peru, as of January 2023, there are about 1,800,000 homes with this energy source. However, if things continue at the level foreseen in the investment plans approved by the regulator, only around 16,000 homes would be connecting monthly nationwide, when up to 30,000 could be connected. The main obstacle facing massification is the general competitiveness of rates with other substitutes, especially in concessions outside of Lima. Permits for the development of networks and interference with other services continue to cause delays for the laying of networks.

Another problem is FISE’s limited resources and the country’s lack of infrastructure. We must seek the expansion of regional transportation pipelines to achieve greater energy security. The State must prioritize a work agenda and focus on the problems of each concession taking into account the reality of each one.

With the massification we could stop depending on other imported fuels, which can be more expensive and polluting. We have the opportunity to have an abundant, clean and cheap resource, a luck that many countries do not have and it depends on the joint work of the Government with private companies to make it reach more Peruvians. An intensive shift towards natural gas would help improve the quality of life.

figures

Cálidda expects to exceed 202,000 connections in 2023, the company reported.

S/20 raised the LPG balloon in the last two years, according to Osinergmin.

reactions

Gustavo Navarro, energy specialist

“The overcrowding is a pending issue, especially in the south, where there have been too many promises and few realities. The networks must reach not only homes, but faucets and businesses in that region.”

Carlo De Los Santos, director of the DGH

“We are evaluating an additional S/350 million for more connections. It is a proposal, but in any case we will reach more than 300,000 users. We are going to massify what no one has done”.

Massification of natural gas at the national level: goals achieved until 2022