Perupetro aiming to solve LNG royalties dispute with Shell

Perupetro is reportedly thinking of taking a dispute with Shell over royalties related to LNG cargo exports to arbitration if the two companies fail to settle. 

Perupetro is seeking additional payment for seven cargoes of liquefied natural gas exported from Peru’s liquefaction facility at Pampa Melchorita last year, Reuters reports.

Under its contract with Perupetro, Shell has to pay royalties based on the final destination price of the LNG cargo according to Oscar Quesada, Perupetro’s promotion and communication manager.

The seven cargoes Shell exported to the United States last year were further re-sold and exported to Asia. This means that Shell paid royalty based on the U.S. gas futures benchmark instead of sharing the proceeds from a larger sum gained through export to Asia.

Quesada said that Repsol did something similar with 10 cargoes it sold in 2010.

Perupetro recently won a similar dispute against PlusPetrol for 10 LNG cargoes exported in the period of 2010-2011 after it filed for arbitration with World Bank’s International Center for Settlement of Investment Disputes.

Quesada added that the two companies are working on solving the issue but did not reveal the sum Perupetro is asking Shell to pay.

LNG World News Staff; Image: Shell