Promigas S A E S P : Natural Gas Coverage In Peru Hit 14% Over The Past Year

NATURAL GAS COVERAGE IN PERU HIT 14% OVER THE PAST YEAR

· This growth was driven by the residential and commercial sectors, totaling 1,554,336 natural gas customers in 2021.

· More than 311,000 new households were connected to the gas network over the past year, benefitting nearly 1,153,000 Peruvians.

· On the other hand, domestic natural gas consumption rose to 673 million cubic feet per day (CFD), 21.3% higher than the 555 million CFD in 2020.

· Promigas presented these figures in the VII edition of the Report on the Natural Gas Sector in Peru, together with the main challenges to continue promoting natural gas in the country.​

Lima, October 13, 2021.- The number of natural gas customers in Peru amounted to 1,555,620 by the end of 2021, a 25% increase compared to the 1,244,172 in 2020. More than 311,000 new households were connected to the gas network over the past year, benefitting nearly 1,153,000 Peruvians in total.

With these results, natural gas coverage hit 14% in the country, two percentage points higher than the previous year, according to the VII edition of the Report on the Natural Gas Sector in Peru presented by Promigas.

This growth was driven by the residential and commercial sectors, totaling 1,554,336 customers in 2021, equivalent to a 25% year-on-year growth. Meanwhile, industrial customers amounted to 893 (+6%), NGV service stations to 344 (+2%), and power generators to 47 (+9%).

The performance of the following concessions played an important role in these 2021 results: Lima, with 1,300,122 customers; the northern concession, with 169,601 customers in the departments of Áncash, Lambayeque, La Libertad, and Cajamarca; and Ica, with 69,150 customers. Piura, on the other hand, which started operations early last year, closed with 3,685 customers by year-end.

"In the last five years, close to 1 million customers were connected to the natural gas service; that is, 3.7 million Peruvians from the residential and commercial sectors, thus contributing to energy poverty reduction in the country. The effective service areas in Peru grew 8 percentage points to 14%. During this period, 8 new departments were connected to the natural gas network: 5 to the north and 3 to the southwest, by means of 3 new distribution concessions: North, Southeast, and Piura," said Juan Manuel Rojas, President of Promigas.

Similarly, according to the report, domestic natural gas consumption rose to 673 million cubic feet per day (MMCFD), 21.3% higher than the 555 million in 2020. This spike was mainly attributed to the consumption of electric generators, which amounted to 419 MMCFD. This figure represented 62% of total domestic consumption in 2021, which was also 16% higher compared to the generator consumption in 2020.

For its part, the industrial sector consumed 169 MMCFD of natural gas (+35%); the Natural Gas Vehicle segment, 60 MMCFD (+27%); and the residential and commercial sectors, 25 MMCFD (+10%).

Massification challenges

In order to accelerate the massification of natural gas, the report recommended adopting a series of measures, such as the implementation of a levelized rate throughout the country, applicable to all concessions.

This initiative aims to offer more accessible rates to natural gas customers, "so as to enable the execution of large-scale distribution networks that serve a larger number of residential customers." The new networks would be financed with commercial and industrial consumption payments.

Also, in terms of exploration and production investments, it is crucial to approve regulations that extend the current contracts held by the private sector in order to ensure the continuity of their operations, thus guaranteeing new natural gas supply.

On the other hand, fossil fuel subsidies, such as LPG, should be eliminated.

The report stressed the importance and need to expand the resources of the Energy Social Inclusion Fund (FISE, by its Spanish acronym), which assured to be a key partner in the massification of natural gas during 2021, with the execution 824,794 household connections throughout the country thanks to its BonoGas program.

Natural gas, an ally of the energy transition

Lastly, the report highlights the importance of continuing on a responsible energy transition process in Peru, given that our territory has already been suffering the consequences of climate change for some time. "Peru is the third most vulnerable country to climate change. In the last 30 years, 22% of out glacier surfaces, which account for 71% of the existing tropical glaciers in the world, have been lost," warned the report.

In this sense, Peru should target natural gas as a key ally in the energy transition process, as this energy source generates the least greenhouse gas (GHG) emissions onto the planet. "Its main advantages include lower CO2 emissions and that it does not emit solid particles that pollute the air.

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