Natural gas concession in Piura could annex Tumbes

Five years after its grand announcement, the Ministry of Energy and Mines (Minem) officially declared the expiration of the concession contract to massify natural gas in Tumbes, and must now decide whether to re-tender the work with a similar scheme or resorts to other mechanisms, such as FISE.

In 2019, the government of Martín Vizcara granted a 20-year concession for gas distribution in Tumbes to the Clean Energy company, which that same year transferred the task to the Gas Natural de Tumbes SAC group. The commitment was to connect, with US$25 million, 16,578 residential clients in the cities of Tumbes, Corrales, La Cruz and Zarumilla between 2022-2030.

The pandemic complicated investments related to the project. January 15, 2022 arrived, the deadline for the Commercial Operation Commission (POC), and nothing was ready. From there, Minem began a contract resolution process that was even aired before the Lima Chamber of Commerce (CCL).

Eduardo Guevara was the Vice Minister of Hydrocarbons at that time. The CMS Grau partner says that the plan was to bring the gas from Talara (Piura) by truck or pipeline, or take advantage of the potential of the Tumbesian lots Z-1 (Vigo) or XXIII (Upland).

Now, he explains, the Government will have to choose whether to re-tender or apply “a scheme similar to that of the southern regions of the country, where it is overcrowded with the FISE.”

For the former director of the General Directorate of Hydrocarbons Erick García, the State must co-finance the networks. The expert maintains that Tumbes exemplifies the “failure” of applying full self-sustainability models, where the demand does not close the concessionaire’s costs.

The difference is abysmal with Piura. Through Gases del Norte del Perú, the Colombian Promigás also took over the region in 2019 and the POC was completed in 2022, according to the terms of the contract. Today they have more than 27,000 connected homes, well above (220%) the contractual goal that corresponds to this year of operation. Now, come with interest to assume Tumbes.

However, the general manager of Promigás, Miguel Maal, explains that the concession would be unviable without a levelized rate at the national level – currently in controversy in Congress – that allows the sustainable development of residential networks.

It is estimated that the distribution infrastructure necessary to serve 5 million new Peruvian households amounts to US$6 billion, hence its urgency.

Massification advances in the south, but is truncated in the north

This week, Minem signed the contract for the execution of the Special Massification Project – Cuscowith the PAFARMIN Consortium, which won the tender that began in December 2023. The project consists of the construction of 25.18 km of networks, including a Satellite Regasification Plant in the San Jerónimo district and pipelines for 1,000 families.

Recently, the Upland Oil & Gas company reported the discovery of gas in Lot XXIII of Tumbes.

The Gas Natural de Tumbes SAC concession contract included a guarantee of US$110,000 that guaranteed the POC in the region.

Promigás estimates that it could bring natural gas from Piura to 18,000 families in Tumbes, through a 140-kilometer pipeline.

Reactions

Erick García, former director of the DGH

“The Government must start implementing new co-financed natural gas massification schemes, now that the law allows it. We know that demand is not self-sustaining throughout the country.”

Eduardo Guevara, exvic. of Hydrocarbons

“Now that there is no dealer, It would be necessary to see if Minem is interested in massifying Tumbes as it does to the south, with FISE resources. But the proximity to producing areas should not be ruled out.”