20-06-07 A proposed $ 830 mm pipeline to pump natural gas to supply a petrochemical complex in southern Peru could be ready by 2011, Energy and Mines Minister Juan Valdivia said.
Peru is seeking to develop a petrochemical industry and to provide natural gas for thermal electric plants and mining companies as well as domestic users in southern Peru. The government has been making a concerted effort to develop the natural gas industry in Peru since the Camisea natural gas project came on stream in mid-2004.

Key to the project, however, is the pipeline. Currently the natural gas is pumped from Peru's south-eastern jungle to a plant in Pisco for separation into propane, butane, naphtha and diesel. Natural gas is also piped for use in electricity-generating stations and for use in industrial plants.
State oil company PetroPeru and a unit of Suez Energy International (SZE) signed a memorandum of understanding in March to carry out a feasibility study for the pipeline.

According to Valdivia, the two companies have finished a pre-feasibility study for the project.
"The pre-feasibility study allows us to clearly see that it is possible to finance this work," Valdivia said. According to the minister, the proposed pipeline will be 700 km long.

PetroPeru is also in the process of carrying out a feasibility study for the petrochemical complex with Brazil's Petroleo Brasileiro, or Petrobras. The general manager of Petrobras' Peruvian unit, Pedro Grijalba, said recently that these studies have advanced significantly. However, he said that it is imperative that Peru's Congress approve legislation to define the framework of the petrochemical industry in Peru.
According to Valdivia, the legislation should provide certain tax benefits for the project to ensure that it is profitable.