Oil and Gas

Peru natgas workers plan strike that could disrupt LNG exports

LIMA, Dec 15 (Reuters) - Natural gas workers in Peru plan to hold an indefinite strike starting Dec. 29 that would disrupt production of the widely-used fuel as well as Royal Dutch Shell Plc’s liquefied natural gas exports, the union SUTRAPPEC said Thursday.

Some 200 unionized workers needed to operate Peru’s Camisea gas fields will down tools to press Argentine energy company Pluspetrol to offer better wages and benefits in a new labor agreement, said SUTRAPPEC spokesman Juan Carlos Vargas.

Pluspetrol owns a controlling stake - 27.2 percent - in the Camisea consortium that produces the vast majority of Peru’s natural gas from a remote jungle region.

Pluspetrol and Netherlands-based Shell, which exports liquefied natural gas derived from Camisea gas production, did not immediately respond to requests for comment.

Peru exported about 400 million cubic meters of liquefied natural gas in the first two weeks of December, according to government data.

A prolonged stoppage at Camisea could fan inflation in Peru, where natural gas powers about half of the country’s electrical production and also fuels cars and homes.

The union said talks with Pluspetrol mediated by the labor ministry broke down earlier this month. Union members voted to approve the strike in the past week and have filed paperwork to secure government permits for the stoppage, Vargas said.

Apart from higher wages, workers are demanding better internet and cellphone coverage in the jungle camp where they work for up to three weeks at a time, and have also asked Pluspetrol to hire more indigenous guides to accompany them when they work near native communities, Vargas said.

U.S.-based Hunt Oil Co controls a 25.2 percent stake in the Camisea consortium and a 50 percent stake in Peru LNG , which operates a natural gas liquefaction plant.

Korea-based SK Innovation owns 7.6 percent of the Camisea consortium, and Tecpetrol Corp, Sonatrach SPA and Repsol SA each have 10 percent stakes.

Reporting By Mitra Taj; Editing by Andrew Hay