Energy and Mining Minister Carlos Herrera said Wednesday that Peru's government has offered the consortium running the Camisea natural gas project two years to find a new guarantor for 2.5 trillion cubic feet of gas that are being used to back financing for the project exporting liquefied natural gas.

The government is in negotiations with the consortium that is exploiting the Camisea blocks in southern Peru, aiming to ensure that no gas from Block 88 goes for export and is instead used domestically.

According to Dow Jones Newswires, Herrera has said that talks are not advancing very rapidly.

"To implement all the programs that we have to make gas more widely available, we need to have the security of what are the proven gas reserves.”

He went on to say that “the only proven reserves of gas that we have are of Block 88. But 2.5 trillion cubic feet are being used as backing for the export project, and they can't be touched."

"All the contracts have been signed under the belief that there is more gas in Peru, that we were going to find more. What we are saying is that there is a two-year term to find more gas, a reasonable time frame for them to find more gas or to find another guarantee that isn't Block 88," he added.

The previous administration started negotiations to change the contract the state has with the Camisea consortium, but those talks stalled.

The previous government also tried to quell criticism by passing a decree saying that gas from Block 88 could not be exported for a five-year period from last year.

The Peru LNG consortium, which last year started shipping liquefied natural gas abroad, is using gas from another block in the Camisea fields.

The Peruvian government signed a 40-year contract with the Camisea consortium in 2000, and the project came onstream in 2004.

Gas from Block 88 was originally meant only for domestic use; however, in 2005 during the administration of ex-President Alejandro Toledo, export of gas from that block was allowed.

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