Odebrecht-Enagas wins Peru gas duct bid as GDF Group barred
SALVADOR, Brazil (Bloomberg) -- Odebrecht SA and Enagas SA won the right to build Peru’s second major natural gas pipeline for $3.6 billion after the government disqualified a competing bid.
A joint bid from GDF Suez, Sempra Energy, Techint Group and Transportadora de Gas Internacional was rejected because GDF reduced its group stake after the two bidders submitted technical proposals last week, Peru’s investment agency said in an emailed statement.
Odebrecht and Enagas will lay more than 1,000 km (622 miles) of pipe from the Camisea gas fields in the jungle, over the Andes, to power plants planned for the Pacific coast. The pipeline will spur Peru’s economy and allow for the development of a petrochemicals industry in the southern part of the country, Energy and Mines Minister Eleodoro Mayorga said.
“Power companies, transport companies and all Peruvians will have access to substantially cheaper energy,” Mayorga said when the bidding results were reported on June 30 in Lima. “Camisea’s resources have been the basis for this country’s economic development for the last 10 years.”
Odebrecht, based in Brazil, and Madrid-based Enagas offered to build and operate the line for 34 years at a total cost of $7.33 billion, less than the $7.8 billion ceiling set by the government, Proinversion said.
The rival group said June 26 that GDF had reduced its stake to 2% from 25%, contravening the rules of the bidding process, the agency said.
Alejandro Segret, an official representing the group, told reporters that the companies complied with the rules and offered a lower total cost of $7.2 billion.
“Each one of our partners complied with the technical and financial requirements,” Segret said.
The pipeline, with capacity for 500 MMcfd, will run through an area of jungle where holdout members of the Maoist guerrilla group Shining Path remain active. The project also includes reinforcing an existing pipeline.
Power plants will consume 70% of the new pipeline’s output, while 20% is earmarked for planned petrochemical plants and 10% for residential and other industrial users, according to Proinversion.
Units of GDF Suez and Israel Corp. won contracts in December to build two 500-megawatt power plants on the south coast of Peru to run on gas from the pipeline.
Braskem SA, a Sao-Paulo based petrochemicals company, is considering building a plant in Peru to produce ethylene and polyethylene using gas from the duct, Mayorga told reporters March 27.
Peru’s President Ollanta Humala was elected in 2011 on pledges to cut residential gas costs and build the pipeline to spur growth in the south of the country, his party’s traditional power base. His government plans to award a record $12 billion of infrastructure contracts this year.
Enagas, Spain’s biggest natural gas supplier, on Jan. 31 said it agreed to buy a stake in the operator of the existing pipeline operator, Transportadora de Gas del Peru.