Legal Framework For LNG Activities in Peru

In the year 2000, at the end of a bidding process, the Peruvian Government granted three phases for the development of the Camisea Project (natural gas reservoir --Block 88- located in Cuzco, Peru). Those three phases consisted on the following:

1. Exploitation of the Camisea field, for the production of natural gas together with associated liquids, process of natural gas and liquids and production of liquids related products.

2. Transportation of the natural gas and liquids from Camisea field to Lima (natural gas) and Pisco (liquids).

3. Distribution of the natural gas in Lima department for industries and local consumers.

The referred activities were granted to private investors under the legal regime established in the Law 27133. According to said legal regime the exploitation activities are regulated under a License Contract and the transportation and distribution activities under BOOT Concession Contracts.

According to the terms of the License Contract, the producer acquired the property of the hydrocarbons exploited and some guaranties and benefits granted by the Government, as well as the obligation to make some investments and to pay a royalty to the Peruvian State for the hydrocarbons exploited. Such License Contract also included some provisions regarding the possibility of developing LNG, gas to liquids or petrochemical pr