5.1. The project

It is planned to erect an industrial project at the coast line of northern Peru for the production of fertilizer based on natural gas as feedstock. The product shall be urea fertilizer which shall substitute imports to Peru and be exported to other countries in South America and the Caribbean.

The project sponsors target to set up the project according to the needs of project financing.

Added value

By end of 2011 Peru is believed to own 12.5 tcf (trillion cubic feet) of natural gas reserves⁹¹. Though today’s production of natural gas in Peru is small (reserves to production ration was 31 by end 2011), production has been increased significantly over the last years (change from 2010 to 2011 +57%) and various projects are under development today to increase the output further⁹².

Natural gas in general can be put to value through trade, consumption/ combustion or conversion⁹³.

Comparing the value adding possibilities in question each one has its advantages and the optimum choice is always a matter of the specific conditions of the gas reserve (size), availability of infrastructure and reserve owners’ policy.

The project will add value during the investment phase (construction works) and during the operational phase. Added value during the latter is employment (salaries) and tax which can be calculated, further value can be expected through development of new workshops and service and maintenance business which will settle down in the vicinity of the production facilities.

⁹¹ BP statistical review of world energy 2012
⁹² Ministerio de Energia y Minas, Plan Estrategico Institutional 2012 - 2016
⁹³ Parmaliana et al (editor), Natural Gas Conversion V