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    Cálidda: "We will invest more than US$ 120 million in natural gas networks by 2023".

    November 27, 2022 - CE Noticias Financieras


      In the midst of rising prices of liquid fuels, the massification of natural gas is becoming even more important and Cálidda plans to invest US$ 120 million to expand its networks by 2023. Regarding the opening of a new natural gas vehicle (NGV) refueling station, the company's CEO, Martín Mejía del Carpio, tells Gestión about the plans in the distribution business in Lima and Callao, but also in other businesses.

      How is the deployment of NGV stations coming along?

      A couple of weeks ago we obtained the permit for the NGV station in San Martin de Porres for the Yellow Line and a few days ago it was inaugurated with the Urban Transport Authority for Lima and Callao (ATU). It will serve to provide natural gas to the buses of the Yellow Line, which already has natural gas vehicle (NGV) units.

      So, how many NGV stations are already connected?

      We have more than 300 stations already connected to natural gas in Lima and Callao, but they are not ours, but belong to different private companies. This -on the Yellow Line- is the first one where we have made an investment, but it is operated by the concessionaire. We did it so that they continue using NGV. It is the first captive station inside a bus yard.

      In the first quarter of next year we should be putting the second (captive) station on the Red Line. In December of this year we are going to put our own liquefied natural gas (LNG) station in Puente Piedra, we are just in the finalization of the permits with Osinergmin, raising an observation and in the next few days we should get the authorization to operate it. There will already be three stations of Cálidda Energía's own brand. We will try to continue encouraging NGV and setting up stations as we see the need and demand, either for public transportation or cargo, which are the two segments we are interested in helping with NGV and LNG in the coming years.

      Won't you target private vehicles?

      The smaller vehicle sector (light vehicles, cabs) for the most part we already have them on natural gas. Of more or less 250,000 cabs in Lima and Callao, 220,000 already consume natural gas and the other 30,000 cabs are mostly LPG (liquefied petroleum gas) and a smaller portion diesel. Next month FISE should be supporting the conversion of LPG units to NGV (only gasoline units could be converted) and there are an estimated 400,000 vehicles in Lima that could use NGV instead of LPG, most of them private vehicles.

      Are the requests to bring NGV to the taps still active?

      Yes, every time we pull the pipeline in certain areas, we connect new stations and they transform their pumps from other liquid fuels to natural gas. In Lima we have built more than 16,000 km of networks, we have passed through 42 districts, we only need to finish the massification in Lima and Callao approximately 4,000 km, but in most of the areas where we are today 300 stations are installed. There would be 20,000 km in all of Lima and Callao, including the Norte Chico, which we are now conducting studies to intervene in 2026 with a new investment plan for the State.

      How many years will it take to cover all of Lima?

      In the next five years we should finish.

      Will the Cálidda Energía refueling stations be only NGV or also for other products?

      The ones that are captive, in the corridors, are only for NGV; and the LNG station (dispenser) will be inside a station of a private brand in Puente Piedra, which also has liquid fuels. The LNG pump will complement the two that Quavii is putting in Chiclayo and Piura, with that we will have the first green corridor so that heavy vehicles can not only consume NGV but also LNG.

      Would it also complement those proposed by Limagas in the south?

      We have listened and talked with them, since we all have to work in this mission of building the necessary infrastructure to bring heavy and cargo transport to use natural gas in NGV and LNG, to be able to transform the entire vehicle fleet that today causes a burden to the State by the Fuel Stabilization Fund.

      Quavii plans to open its stations at the beginning of 2022, at that time will the LNG corridor from Lima to the north be completed?

      Of course, with three stations. We still have two stations approved by the Board of Directors and we are waiting for this station -in Puente Piedra- to start operating. The regulation has taken a long time, it came out last year, the permits for the station came out this year. We are going to put the second station probably to the south of Lima, almost on the border with Ica, which is where we are looking to put the fourth LNG station - of the corridor - to begin to expand this corridor and add more according to demand.

      Does Cálidda Energía plan to have stations for private (light) vehicles?

      With Cálidda Energía we want to promote everything related to cargo and heavy transport and we have to set up stations within the yards of transport and logistics companies. We are going to do this in order to continue increasing the consumption of natural gas. And another of the segments we have been working on, and we already have projects there, is the generation of electricity based on natural gas, that is, self-generation. We already have a 4 MW natural gas generator in the Puruchucho Mall in Ate. This is Cálida Energía, not only dedicated to transportation but also to energy solutions.

      How will this new business be developed?

      They are generators that consume natural gas and inject energy directly to the industry and not to the interconnected system. They generate energy for the industry that demands it. We want to replicate it with free clients that demand energy between 2 and 10 MW.

      How are vehicle conversions to natural gas going?

      Last year we converted 2,000 vehicles per month and today we are converting almost 6,000 vehicles per month: it has tripled.

      Residential segment

      How are the rates of home connections coming along?

      Last year we built more than 2,300 km of natural gas distribution networks in Lima and Callao, which allowed us to connect 250,000 new users. This year we should be building approximately 1,400 km, with which we are connecting more than 100,000 new customers. In addition, there are 140,000 new connections over the network built in previous years. We have less network construction, but we will connect almost the same number of users as last year.

      Why was network deployment reduced in 2022?

      2021 was an atypical year, we did pending networks that we had not done in 2020 due to the pandemic, we stopped for four months and in addition to that almost 300 km of networks were done with funds from the State, which made a pilot with us to use the FISE to make natural gas distribution networks and that do not enter within the investment component in the tariff so that it does not increase.

      Will 2023 maintain this year's pace?

      Of the five-year plan that we presented in 2021, we would be missing 800 km next year. We would be finishing them in September, but now we are talking with our Board of Directors to extend this plan and continue building networks to finish in five years all the networks that are missing to finish 100% in Lima and Callao. By 2026 there were 1,850 km that we had approved by the Government -in the last five-year plan-, we are already finishing that next year. In two years we are doing what we proposed to do in four.

      By how much would the objective be extended?

      We are just studying some areas, finishing the field work and very probably next year we will present to the Government an extension of this plan by approximately 1,000 additional km. We are very close and the areas we are missing are much more complex, the rate of progress will surely not be 1,000 km per year, but 500 km in 2024 and 2025. What we are missing is 3,000 km, of which there are 1,000 km in the Norte Chico, 1,500 km in level A and B districts, and 500 km in other districts.

      We are also working on an initiative to bring gas to the hills. For this purpose, we have already submitted a technical report to Osinergmin and the Ministry of Energy, who are currently reviewing what has been submitted to enable a first pilot project in Peru in hills where we cannot enter for technical reasons.

      By 2025 would you be completing the expansion of the network in middle and low SES districts?

      Yes, we would only have the small north and some of the small south, but that would be for the next plan, except for the hills, which we do not have in our work plans because there is no authorization. There are at least 200,000 houses there, at least half of which could be connected to gas. For the next plan, to be presented in 2025, there will be the Norte Chico, the remaining part of the Sur Chico and the end of the high NSE areas.

      What would be the budget for all the plans for next year?

      We are going to invest more than US$ 120 million in natural gas distribution networks.

      Meanwhile, how is demand from free customers coming along?

      It has grown a little, more or less 2% compared to before the pandemic and it is tied to the growth of the economy. All the large industry in Lima is connected, cement, ceramics, food and glass companies, which are the main industrial consumers we have, as well as small industry, but the ones that move the needle in terms of volume are the generators and large industries.

      New concessions

      Do you see new business opportunities beyond the current concession?

      We are still looking at Lima and we want to finish, but we are willing to help the Government to materialize the distribution in certain areas where we have some progress. We did studies of the entire Seven Regions area (Ucayali, Ayacucho, Cusco, Puno, Junín, Huancavelica and Abancay) that failed, because the model that the Government was implementing was complex for the gas demand in those regions. What the Government has done is to separate each region and make an evaluation of each one to see how natural gas consumption can be materialized.

      What would be your proposal in the Seven Regions?

      We have studied the zones and we are going to present this to the Government. In order to make gas viable in these regions, the Government needs to invest in the networks so that it does not enter into the tariff component and thus competitive tariffs can be achieved. If the Government does not invest, the tariffs would not be competitive: an LPG balloon would be cheaper than piping the gas to the users.

      In this area we have already seen Limagas in Cusco, which has made considerable progress and we have been with them and with Pluspetrol. The Regional Government of Cusco wants to help this materialize. It is willing to provide the funds to build the networks. In Ayacucho, the city already has a transportation pipeline and there is no need to build a virtual pipeline (with tankers). But Huamanga could start with natural gas distribution networks and the State should build them anyway, since the demand is very small. These two cities will be the first to have gas if the State invests in the networks.

      Would the distributor be in charge of the virtual transport and the connection to the houses?

      Both the construction of external networks and the internal home connections should be paid on the basis of a subsidy so that this can be materialized in Cusco and Ayacucho. Then, who would do the operation, maintenance and commercialization? It would be the State itself with its distributors or a private company. In the case of Cusco, the interested party is Limagas, there it is with a virtual pipeline. Not in Ayacucho, but there is less demand.

      How much less demand is there?

      In Lima there are 700 million cubic feet of demand (500 million from thermoelectric generation and 200 million from industry, vehicles and residential). In Ayacucho there is an estimated 1 million and in Cusco 3 million. They would not be able to pay with that the investments in distribution networks. This is one of the things that the State has to study. Invest in networks if they want to bring gas to homes and vehicles. In Cusco and Ayacucho there are no natural gas generators, there are technical restrictions due to efficiency issues. These regions live from commerce, agriculture and tourism, so they do not have a great demand for energy.

      Would Calidda participate in a possible bidding process?

      We would have to evaluate the conditions, but now we have enough to do to finish our work in Lima.


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