In recent months, key developments have highlighted a concerted push toward gas natural expansion. Olympic Perú, which operates hydrocarbon blocks VII and XIII in the Piura region, announced plans to build a regional gas pipeline and a liquefied natural gas (LNG) plant with a capacity of 10 billion cubic feet, expected to begin operations by late 2026. These initiatives will supply over 90,000 families and industrial users and support two thermo-electric plants, strengthening energy availability in northern Peru. Olympic Perú also aims to increase its upstream development rapidly with new exploratory wells, setting a blueprint for boosting reserves.
Meanwhile, the government is reviewing an extension of Cálidda’s concession, enabling the company to invest approximately 1.6 billion soles to expand gas service to seven regions in central and southern Peru. This expansion could connect an additional 150,000 homes and benefit nearly 800,000 people, while generating thousands of new jobs and reducing carbon emissions by nearly 195,000 tons. Transportadora de Gas del Perú (TGP) is separately planning to fast-track a 2 billion dollar investment that would extend the Camisea gas pipeline system 923 km southward, reaching Moquegua and Arequipa. The expansion includes capacity upgrades designed to nearly double daily gas transportation volumes to 1 billion cubic feet and accommodate growing demand from power generation and industry in the south.
Despite these positive steps, Peru’s gas sector contends with a critical challenge: a persistent decline in exploratory activity that threatens future reserve levels. Recent years have seen an unprecedented drop in drilling, with only two exploratory wells drilled in 2024 compared to over ten per year a decade ago. Total proven gas reserves stand at approximately 7.4 to 7.8 trillion cubic feet, sufficient for roughly 12 to 15 years at current consumption rates. However, the rate of reserve replenishment has been negative, signaling an urgent need for increased upstream investment and regulatory reforms to incentivize exploration. Stakeholders emphasize the necessity of updating the national energy policy with a vision through 2050, streamlining fiscal frameworks, and fostering legal certainty to attract new capital and improve exploration outcomes.
The expansion of gas infrastructure also confronts a steep challenge in addressing pronounced regional inequalities. While Lima and Callao boast over 50% service coverage, many other regions experience coverage as low as 7%, hampering economic development and energy efficiency improvements outside the capital. Current tariff structures vary widely, with northern and southern regions facing industrial gas prices two to three times higher than Lima’s. Such disparities increase reliance on costlier alternatives like virtual gas transport or diesel generation. The implementation of tariff harmonization and the construction of additional pipeline extensions are critical agenda items to promote equitable and sustainable energy access nationwide.
The role of natural gas remains vital in Peru’s energy matrix, supplying approximately 60% of the country’s electricity generation. It delivers cheaper, more stable, and cleaner energy compared to other fossil fuels, and offers significant cost savings and environmental benefits in transportation and industry. The sector’s growth is a lynchpin for economic competitiveness and environmental goals, particularly as Peru seeks a balanced energy transition. However, recent incidents like the January 2025 disruption in the Camisea pipeline underscored the vulnerability of the system, causing temporary spikes in electricity generation costs and reinforcing the imperative for robust infrastructure and diversified supply sources.
Looking ahead, the government, industry players, and civil society are collaborating through forums such as the upcoming “Gas Natural Perú 2025” conference to strategize the sector’s future trajectory. Discussions will focus on overcoming investment bottlenecks, regulatory improvements, and the advancement of sustainable gas projects, aiming to enhance service coverage, energy security, and regional economic development. The coordinated push across multiple fronts signals Peru’s commitment to preserving natural gas as a strategic energy asset in the decades to come.
This article was curated and published as part of our South American energy market coverage.
