Financial Times
Peru to sign gas pipeline contract

By Naomi Mapstone in Lima

The construction of a $1.4bn (£788m) 700-mile pipeline to carry natural gas from Peru's Camisea fields to its impoverished south will begin in 2010, according to Kuntur Transportadora de Gas, which will sign a contract with the country's government on Monday.

Kuntur, a subsidiary of US private equity firm Conduit Capital, which focuses on infrastructure in Latin America and the Caribbean, says construction will take up to three years.

"This will be a major economic driver in this region for years to come," said Samuel D. Gómez, president of Kuntur. "The south is the most economically deprived area in the country and in addition to the pipeline we could see billions of dollars of incremental investment, including petrochemical plants, power plants and cement plants."

The pipeline will take natural gas from Camisea, in Cusco department, to the port of Ilo in Moquegua.

US-based Energy Transfer del Perú also bid for the pipeline, and the government rejected a bid by Suez Energy Perú for an $850m pipeline that would run along the Pacific coast.

J. Scott Swensen, chairman of Conduit, said Kuntur had a memorandum of understanding to work with Odebrecht, the Brazilian construction firm, and was in discussion with others.

"At the moment, we own 100 per cent," he said. "Where we intend to end up is with the local company having 48 per cent ownership by strategic investors – Odebrecht and one or two others – and we will control 51 per cent of the project between funds that we manage and other investors."

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