Ministry Set to Launch Camisea Audit Tender After 5th Spill

Peru's energy regulator Osinerg has completed preparing the bidding rules for an audit of the construction of the Camisea pipeline project and will call for bids in coming weeks, Peru's energy and mines ministry advisor Mario Nicolini told BNamericas.

"Their aim is for a huge international company to do the audit - the biggest," he said.

Osinerg announced its intention to conduct the audit late last year in response to various spills on the Camisea natural gas liquids pipeline, an Osinerg spokesperson told BNamericas, adding that the audit process was considered "necessary."

The energy ministry announced in December that Osinerg was expected to choose a consulting firm to carry out the review by January 2006, but the Osinerg spokesperson could not provide a reason for the delay.

The audit is considered especially necessary in the midst of controversy surrounding the integrity of the project's construction and confirmation by the pipeline's operating consortium TGP this week of a fifth spill in just 15 months of operation.

US non-profit environmental consultancy E-Tech International released an evaluation of the project last week that alleged defective construction methods employed by TGP.

TGP has blamed previous pipeline ruptures on landslides and has fervently denied allegations the company used corroded pipeline for construction, employed pipeline welders and inspectors who were inexperienced or uncertified and conducted insufficient soil evaluation and hydrostatic testing.

However, the latest spill on March 4, which caused a fire and injured two people, occurred in the Cusco region at km 126 in one of six pipeline sections identified by the E-Tech report as prone to future ruptures.

Some 750 cubic meters of gas liquids were spilled, TGP said in a press release, adding that an investigation is underway to determine the cause of the incident.

Energy ministry director general of hydrocarbons Gustavo Navarro traveled to the area on March 6 as part of a ministry commission to investigate the spill.

The commission is waiting to get water out of the pipeline, after which the section of piping will be transported to Houston for analysis, Nicolini said.

TGP is led by Argentine construction firm Techint, which has a 23.4% stake in the pipeline. Other partners are Argentina's Pluspetrol and US company Hunt (22.2% each), South Korea's SK and Algeria's Sonatrach (11.1% each), Belgium's Tractebel (8%) and Peruvian construction company Grana y Montero (2%).

Peru's President Alejandro Toledo turned on the taps of the Camisea natural gas project in August 2004, two decades after the reserves were discovered.

Gas is transported 720km from wells in block 88 in the Amazon jungle across the Andes to the coast. There are two pipelines, one for natural gas and one for natural gas liquids (NGLs).

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