The engineering study, awarded at a cost of $8.5 million, will be prepared by Halliburton's Kellogg Brown & Root office in Houston, Texas. When completed in approximately eight months, the study will provide the foundation for the construction of an LNG liquefaction facility and marine terminal on the coast of Peru south of the capital of Lima.
Natural gas for the Camisea LNG export project will be produced from the Camisea gas fields in Peru, estimated to contain 13 trillion cubic feet of natural gas. Development of the field and construction of a pipeline and related facilities to deliver gas into Lima, the capital of Peru, are currently underway. The initial development of the Camisea gas field and the construction of the pipeline are expected to be completed in 2004.
Peru's Minister of Energy and Mines Jaime Quijandria was in Dallas Friday to attend the signing of the FEED study agreement. Other attendees at the signing included Ray L. Hunt, chairman of Hunt Oil Company, James B. Jennings, president of Hunt Oil Company, Stephen Suellentrop, president of Hunt Oil Company of Peru, and Randy Harl, president and CEO of Halliburton Kellogg Brown & Root.
Minister Quijandria said, "I am very pleased to witness the signing of this agreement on behalf of Peru. We are a country blessed with significant quantities of natural gas to satisfy both our own internal needs as well as supply gas for an LNG export project. This is the first major step in the effort for Peru to become an LNG exporter to both the west coast of the United States of America and the Republic of Mexico in the years ahead. Such a project could have a significant economic benefit to Peru."
Ray L. Hunt, chairman of Hunt Oil Company, said, "We are extremely pleased to have entered into this agreement with Halliburton Kellogg Brown & Root and to have the strong support of the government of Peru. This project could be very beneficial to the people of Peru. We believe that Peru is ideally situated to become South America's first country to export LNG. We are confident that this study will lead to additional steps to steadily advance the development of an LNG export project which could have first shipments as early as the last quarter of 2006."
The scope of the FEED contract will include studies from the inlet to the LNG facility, through the liquefaction process, to the marine LNG loading facility. The design study contemplates a one-train liquefaction plant with a total production capacity of at least four million metric tons per annum, which is the production equivalent of 545 million cubic feet of gas per day or 58 million barrels of oil per year. Halliburton Kellogg Brown & Root will also study and engineer plans for a dehydration facility, an acid gas removal facility, and other necessary infrastructure required for safe and efficient operations at the Peruvian LNG export facility. The Camisea natural gas fields are among the largest gas fields in South America.
Concurrent with the FEED contract but in a separate agreement, additional studies will be conducted which will result in an environmental impact assessment for the Camisea LNG export project.
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