To understand where we’re headed, it’s sometimes necessary to look back and analyze success stories in the region. In that context, it’s worth asking: What did the shift in natural gas supply that began nearly 25 years ago mean for Peru, and how did it impact the entire industry?
In reality, the gas reservoir was discovered by Shell, but discovering a resource is not enough; the difficult part is creating the conditions to turn it into a system. In Peru, we had a period when the resource was there, but development was not moving forward. Many remember that stretch as a “valley of death,” because everything came to a standstill and the country continued to depend almost entirely on oil, without a truly coordinated natural gas industry.
The important change came when a legal framework was established that actually made the project viable. In this regard, the Organic Law on Hydrocarbons was decisive, because it allowed for the regulation of the relationship between the State, investment, and infrastructure development. Camisea was not merely a geological discovery or an engineering feat; it was a decision regarding institutional architecture
Today, when we see that Camisea accounts for nearly 96% of the country’s natural gas production and contributes about 40% of the nation’s electricity, we understand that we are not talking about just another project, but rather a structural cornerstone of Peru’s energy sector.
What made this Law’s entry into force possible?
What made the law possible was giving the project an economic and institutional framework. A vertical separation of the business was chosen: production, transportation, distribution, and marketing were not concentrated in a single entity.
The second key pillar was the Main Network Guarantee. Without a mechanism to ensure demand, an infrastructure of this magnitude could not be financed. That scheme made it possible to turn the resource into a viable system.
This led to a profound transformation. It resulted in cost reductions, the replacement of liquid fuels, greater competitiveness, and energy diversification.
But even more importantly, energy security was achieved. Natural gas ceased to be an option and became a cornerstone of the Peruvian electricity system.
The Main Network Guarantee (GRP) for the Camisea project had three pillars: electricity generation, gas distribution, and LNG exports. These were not isolated components, but rather an integrated system that ensures economic sustainability.
Regarding where the greatest value lies in the upstream sector, it is important to remember that the most competitive margins are in natural gas liquids. Blocks 88, 56, 57, and 58 follow a strategic logic: domestic consumption and international monetization.
Let us recall that the gas from Cusco is transported via the TGP pipeline across the mountain range to Lima. It is a complex infrastructure that connects the jungle, the highlands, and the coast, and enables the integration of the entire energy system.
LNG Infrastructure and Distribution
When analyzing the components of the Peru LNG plant, its dual role stands out: it not only connects the Peruvian system to the global market but also enables virtual transportation to areas without pipelines, thereby expanding access to natural gas in remote regions.
On the other hand, the question arises as to how the distribution system operates from Melchorita. This process is carried out using tanker trucks that transport LNG to satellite regasification plants; a logistical solution that allows for the expansion of energy coverage in the short term, although it entails higher operating costs compared to physical pipeline infrastructure.
Natural Gas Demand in Peru
The residential sector dominates in terms of the number of users, but the greatest demand comes from electricity generation and industry. Gas is key to the productive system.
Peru has approximately 7.88 TCF* of proven reserves. Rather than focusing on exact years, the challenge lies in how these reserves are managed in the context of growing demand.
The challenge is no longer to demonstrate the success of Camisea, but to decide what to do after that success: how to turn it into a pillar for an orderly and sustainable energy transition.
