Odebrecht, Enagas consortium wins South Peru Gas Pipeline

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Odebrecht, Enagas consortium wins South Peru Gas Pipeline

Proinversión, Peru’s private investment promotion agency, has awarded to the consortium made up of Enagás (25%) and Odebrecht (75%) the 600,000 Mcf/d Southern Andean Gas Pipeline project.

The team beat out competition from the consortium Gasoducto Peruano del Sur, made up of GDF Suez, Sempra, Techint and TGI. Proinversion disqualified the consortium after reviewing its technical proposal.

Accoridng to Reuters, the group complained about Proinversion breaking bidding rules by not giving it enough time to respond to an inquiry about the stake each company has in the consortium. The group said that it would have won the concession because it offered lower operating fees.

The award covers the construction and subsequent operation and maintenance of a 1,000-km-long gas pipeline, which is key for safeguarding supply in Peru. The pipeline is scheduled to be brought on stream for commercial use in 56 months and the concession is for 34 years.

The consortium will invest between $3.6 billion and $4 billion to build the pipeline, and charge $7.329 billion for services offered during the 34-year concession, said Proinversion.

During the construction, Enagás and Odebrecht will invest around US$1 billion of equity in the project, which will be funded through a project finance structure. The take-or-pay contracts of the infrastructure enable revenue stability to be ensured.

Odebrecht is a Brazilian company which has been present in Peru for 35 years and is a leading specialist in constructing important projects in the infrastructures sector. For Enagás, Odebrecht is a strategic partner which offers capabilities that complement the company's own.

Enagas is the technical manager of the Spanish gas system and the main carrier of natural gas in Spain.

In the consortium, Odebrecht will bring the technical construction capabilities that are needed in a country like Peru, whereas Enagás, as a qualified operator, will contribute its extensive knowledge and experience in operating and maintaining a complex gas system, as is the case in Spain.

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