The Peruvian Government has severed ties with the Gasoducto Sur Peruano (Peruvian Southern Gas Pipeline) consortium —of which Brazilian construction giant Odebrecht is part— after it missed today's deadline to secure 100% financing.
"The project will go no further with its current stakeholders. They have failed to prove financing," Energy and Mines Minister Gonzalo Tamayo affirmed.
In response, the government official announced the creation of a specialized committee to put the said venture up for auction as soon as possible.
"We will create a committee within ProInversion, a State-run agency specialized in Public-Private Partnerships (PPPs) bidding processes, to take over all administrative responsibilities and proceed with the pipeline's contract," Tamayo said.
Following Gasoducto Sur Peruano's withdrawal from the concession, the government will demand the payment of US$262-million from the said consortium as compensation for breach of contract.
Despite such situation, the Minister affirmed Peru's Southern regions will have natural gas access within two years at the latest. This is to be achieved through alternative schemes such as "virtual gas pipelines" focused on the general population, as well as small- and medium-sized industries.
In this sense, natural gas sales via tank trucks are slated for June in Peru's Southern Arequipa, Tacna and Moquegua regions. This way, the government expects to guarantee supply for 11,000 homes in Arequipa by end-2017.
"This is an alternative plan focused on citizens, as it protects the country's Southern population from the harmful effects of delays in the Southern Gas Pipeline construction," Tamayo assured.
Formed by Brazilian Odebrecht, Spanish Enagas and Peruvian Graña y Montero, the said consortium will now have to return the US$7-billion concession.
Odebrecht's consortium had to show proof of financing to contract grantor; that is, Peru's Energy and Mines Ministry by Monday, January 23.
(END) RGP/MDV/DHT/MVB