Hunt signs LNG sales memo with Tractebel

US oil company Hunt Oil has signed a memorandum of understanding (MOU) with Belgian company Tractebel to sell 2.7 million metric tons (mmt) of liquefied natural gas (LNG) a year from Peru's Camisea natural gas project, Hunt said in a press release Monday. Tractebel plans to receive the LNG at its proposed US$500mn re-gasification terminal at the port of Lazaro Cardenas in Mexico's Michoacan state, according to previous reports. Tractebel would use all of the gas to meet its market needs in Mexico, the statement said. On the supply side, Hunt also announced that it has signed a letter of agreement with Argentine company Pluspetrol to purchase excess natural gas from the Camisea fields to be used in its proposed LNG liquefaction plant to be built on the Pacific coast. Hunt plans to sign more definitive sales and gas supply agreements by the end of 2003, the statement said. "We are very pleased to announce these purchase and sales agreements today, which signifies that significant progress has now been made in the 'pre-launch' phase of the Peru LNG project," Hunt's chairman Ray Hunt said. Hunt's operating company for the LNG project, the Peru LNG Company, plans to build a liquefaction plant at Pampa Melchorita, 169km south of Lima. The plant will produce some 4.4 million metric tons of LNG a year and "is designed for future expansion in order to accommodate additional new discoveries of excess gas in Peru, as well as to receive possible imports of natural gas from neighboring countries," the statement said. Hunt is entering "a new phase" of the project, which will finalize the ownership arrangements of the company and see the project's financing completed in "a timely manner," Ray Hunt said. First LNG delivery is scheduled for late 2007 or early 2008 depending on when final financing commitments are obtained. The Peru LNG company is currently in negotiations with other potential buyers for the remaining LNG volumes that will be available from the facility, Hunt added. Hunt's partner in Peru LNG is South Korea's SK Corporation and "other equity participants in [the company] will be announced in the short term," the statement said. Hunt and SK also have stakes in Camisea's upstream consortium, which is led by Pluspetrol. Argentina's Tecpetrol is the other member. LNG exports from Camisea will earn Peru some US$600mn a year, according to statement from the energy and mines ministry, which added that the state would collect 30% of this in income tax.