Odebrecht, Enagas Win Bid for Peru Gas Pipeline

Peru’s government awarded on Monday a contract to Brazilian construction giant Odebrecht and Spanish firm Enagas to build a natural gas pipeline for the country’s south highlands and coast.

Investment promotion agency ProInversion said the consortium, Gasoducto Sur Peruano (GSP), bid $7.328 billion for the project, which consists of the design, financing, construction, maintenance and delivery to the State of the pipeline.

ProInversion’s decision is being contested, however, by the second consortium in the bid, Gasoducto Peruano del Sur, formed by international companies GDF Suez, Sempra, Techint and TGI.

Officials said the consortium was disqualified for trying to make last-minute changes to its legal statements (an adjustment in share percentages of its member companies). The GDF Suez-led consortium, however, argues that it was disqualified an hour before its 9:30am deadline on Monday to file the changes.   The consortium had been given the 9:30am deadline when three days earlier it had requested the extension.  It also argues that its $7.192 bn proposal would have been the winning bid if ProInversion had not brought the deadline foreward.

The project is seen as one of President Ollanta Humala’s biggest energy projects, a campaign promise to provide inexpensive energy to the southern highlands of Peru.

The 1,000-kilometer long pipeline will transport gas from the Camisea fields deep inside the Amazon region to Mollendo on Peru’s southern Pacific Coast. Along the way, it is designed to pass through Andean towns and villages between Cusco and Moquegua where it will provide cheaper energy to residents and local businesses.

The project is expected to provide employment to some 5,000 people.

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