UPDATE 1-Peruvian regulator in dispute with Shell over LNG royalties
(Adds comments from Shell and additional comments from PeruPetro)
By Oleg Vukmanovic
PARIS, June 2 (Reuters) - PeruPetro is in dispute with Anglo-Dutch oil firm Shell over royalties related to the export of seven Peruvian liquefied natural gas (LNG) cargoes last year, the regulator said, adding it hoped to reach a deal soon or would resort to arbitration.
Supplies from Peru's 4.45 million tonne per annum LNG export plant are handled by Shell, which acquired the asset from Spain's Repsol in 2014.
Under the terms of its contract, Shell must pay the Peruvian government a royalty based on the final destination price of where it sells the LNG, PeruPetro's promotion and communications manager Oscar Miro Quesada told Reuters in an interview earlier.
But Shell in 2014 exported seven cargoes to Mexico, paying Peru a royalty based on the U.S. gas futures benchmark, one of the lowest prices in the world. It then re-sold the LNG to be exported to Asia, pocketing a much bigger sum and not sharing the proceeds with Peru, Miro Quesada said. Later, however, PeruPetro president Luis Ortigas said by telephone that Shell sold the LNG at a higher price within Mexico, because of surging demand and did not share the proceeds with Peru. "They did not break the contract," Ortigas said.
Shell declined to share specific details about its commercial transactions, but said it believed it had met all regulatory and contractual obligations in Peru. Shell declined to discuss any talks with partners.
"During the 2014 winter Shell was able to export LNG from Peru outside its long-term contractual obligations to the Mexico Federal Electricity Commission (CFE)," Shell said in a statement late Tuesday. "This helped maximize LNG production in Peru."
Ortigas said PeruPetro is meeting with Shell on Thursday to discuss a potential payment to solve the dispute. Continuación...