Peru Receives Two Bids for Southern Pipeline Project

Peru’s government received Thursday two proposals to build and operate a major gas pipeline in the country’s south that is expected to require billions of dollars in investment.

The state agency responsible for promoting investments, ProInversion, said it received bids for the concession for the Southern Peruvian Gas Pipeline from two consortia.

The groups include the Southern Peruvian Gas Pipeline consortium, which is made up of Brazilian firms Odebrecht and Enagas. The other group, called the Peruvian Gas Pipeline in the South, includes GDF Suez, Sempra, Techint and TGI.

Both groups presented their technical and economic proposals to ProInversion on Thursday.  A third bidder, U.S.-based Energy Transfer, decided to withddraw.

The proposals are expected to be analyzed and ProInversion is to announce the winner on Monday, the agency said in an emailed statement.

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, authorities say it will pass through Andean towns and villages where it will provide cheaper energy to residents and local businesses.

The agency says the project is expected to require an initial investment of $3.6 billion and will provide employment to some 5,000 people.

Former Energy and Mines minister Carlos Herrera Descalzi and the dean of the Economics faculty at UPC university, Carlos Adrianzen, have questioned the financial viability of the project, and believe that the utility users will have to pay high rates in order to make the project profitable for investors.

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