PipeSaks selected for Peru's Camisea Natural Gas Project

PipeSak saddleweights have been deemed the weight of choice for the Techint Group's Camisea Natural Gas Project in Peru. PipeSak Incorporated has supplied Techint International with their 14", 24" and 32" saddleweights for their US$820 million dollar project scheduled to be completed by August, 2004.

The Camisea natural gas reserves are one of the most important non-associated gas reserves in Latin America and are ten times greater than all other existing gas reserves in Peru. The Camisea project has been in the works since 1988 when the first Terms of Agreement contract for the exploitation of the Camisea reserves was signed. However, no agreement could be reached and the contract went unfulfilled. It was not until 1994 that another contract was signed for the Evaluation and Development of the Camisea fields between Petroperu and a private company.

After the feasibility study was concluded Petroperu signed another exploitation contract with a private consortium in May of 1996. The consortium decided to back out of the second leg of the contract in 1998. Finally, in May of 1999, the Special Committee for the Camisea Project (CECAM) was formed and international public bidding took place to award the license agreement for the Camisea exploitation, as well as liquid and gas transportation to the coast and gas fuel distribution in Lima and Callao. The project was divided into three separate contracts; the Upstream, the Transportation and the Distribution contracts.

The Transportation section of the project includes the construction and operation of two pipelines, one to transport natural gas from Camisea to Lima (714 km), the second to transport natural gas liquids from Camisea to the coast (540 km). A third pipeline will be built for the Distribution section of the project to distribute the gas in Lima and Callao. The total Transportation project cost is estimated at US$820 million, with commercial operations to start no later than August, 2004.

The Camisea project will have a huge impact on the Peruvian economy. It will create more jobs, generate significant foreign investment inflows, reduce the deficit in Peru's hydrocarbon trade balance, and potentially form a lucrative gas-based petrochemical industry. The low-cost source of energy will also ease environmental concerns by substituting fossil fuels such as diesel oils, fuel oils and coal with cleaner burning natural gas.

However, the project itself is located on one of the world's most ecologically prized rainforests - the Lower Urubamba Valley located within the Southwestern Amazon. The project is sure to cause disturbance to this ecologically sensitive area. PipeSak Inc. will help minimize the environmental impact by providing an environmentally friendly form of buoyancy control.

Other forms of buoyancy control such as concrete coating and concrete saddleweights have been known to leach chemicals into the ground water. This could definitely have a negative impact on surrounding plants and wildlife. PipeSak's fabric saddleweights are made from a non-biodegradable polypropylene fabric and are filled with local gravel. This means the weights are as environmentally friendly as the stone used to fill them. PipeSak saddleweights also allow the pipe to move slightly while still maintaining buoyancy control. This is a major advantage in areas prone to ground movement. PipeSak saddleweights are much gentler on the pipe itself, reducing the chances of damage to the pipeline - which is always a concern with other methods of buoyancy control.

The completion of the Camisea project will certainly act as a stepping stone for Peru into the world gas market. It is certain to have numerous impacts on all aspects of the Peruvian economy as well as Peru's interactions with the global market. PipeSak Incorporated is glad to have played a part in this history making endeavor.

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