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Odebrecht and Enagás awarded 1000km Peru pipeline contract

01st July 2014

The consortium made up of Enagás (25 per cent) and Odebrecht (75 per cent) has been awarded the project for the South Peru Gas Pipeline put out to tender by the Peruvian government, in a reported USD 3.6bn contract

Odebrecht and Enagás awarded 1000km Peru pipeline contract
The pipeline will allow Peru to development a petrochemicals industry

The award covers the construction and subsequent operation and maintenance of a 1,000-kilometre-long gas pipeline, which is key for safeguarding supply in Peru. The pipeline is scheduled to be brought on stream for commercial use in 56 months and the concession is for 34 years.

“Power companies, transport companies and all Peruvians will have access to substantially cheaper energy,” said Peru’s energy and mines minister Eleodoro Mayorga to reporters yesterday in Lima. “Camisea’s resources have been the basis for this country’s economic development for the last 10 years.”

During the construction, Enagás will invest around USD 250m in the project, which will be funded through a project finance structure. The take-or-pay contracts of the infrastructure enable revenue stability to be ensured.

Odebrecht is a Brazilian company which has been present in Peru for 35 years and is a leading specialist in constructing important projects in the infrastructures sector. For Enagás, Odebrecht is a strategic partner which offers capabilities that complement the company's own.

In the consortium, Odebrecht will bring the technical construction capabilities that are needed in a country like Peru, whereas Enagás, as a qualified operator, will contribute its extensive knowledge and experience in operating and maintaining a complex gas system, as is the case in Spain.

This transaction is in line with the criteria laid out in Enagás' Strategic Update for 2013-2015, as well as with the company's core business and its target profitability and debt-level figures.

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