The Peruvian government has indicated that it intends to build a power plant which will burn gas from the Camisea gas fields, currently under development, but that it will eventually transfer the plant to the private sector, Dow Jones reports.
The Energy and Mines Minister said that the government did not want to run the plant but it considered it to be important that the plant was built because future electricity costs depended on the arrival of gas into the Peruvian market. Camisea is due to be developed by Royal Dutch/Shell and Mobil Corp.
The government is sensitive to the effects of prospective gas-fired power plant projects on electricity prices. In 1996, Shell announced that it would be involved in a project to build a gas-fired power plant. This resulted in a fall in electricity prices.
Then in 1997 the company changed its mind and as a result, the government claims, electricity prices rose again. Shell claims that other economic factors caused the fluctuations in prices.
Although gas is due to flow from Camisea in 1999, Shell and Mobil have still to make a firm commitment to its development.