Spanish-Brazilian consortium signs Peru gas pipeline contract

Lima, Jul 23 (EFE).- The consortium made up of Spanish energy company Enagas and Brazilian construction giant Odebrecht signed a contract here Wednesday with Peru's Energy and Mines Ministry for the construction and operation of a natural gas pipeline that will run from the Camisea gas fields to the Pacific port of Ilo.

President Ollanta Humala said after the signing ceremony at the presidential palace that the deal is an historic milestone for natural gas development in Peru, adding that that resource had been "sleeping" in the subsoil since the 1980s.

"Those were tough times. We didn't have all the experience for using such an important raw material" and the country was ineligible for loans, Humala recalled.

Now, he said, Peru aims "to be able to industrialize this resource and become an energy exporter to the region and the world."

"Peru is working on an energy diversification policy and the gas gives us valid reason to talk about the development of a petrochemical industry in the south of the country," Humala said.

Energy and Mines Minister Eleodoro Mayorga, for his part, expressed confidence that Odebrecht and Enagas will provide the efficient service that "all Peruvians expect."

"We expect that the investment outlay, which in three or four years should be around $3.6 billion, and the (consortium's) work over the 30-year concession will be efficiently fulfilled as Peru is demanding," the minister said.

The consortium was awarded the concession for the Southern Peruvian Gas Pipeline on June 30 after offering to charge $7.33 billion for the total cost of services provided during the 34-year duration of the concession.

The project involves the design, financing, construction, operation, maintenance and transfer to the state of a pipeline system that will run for 1,000 kilometers (620 miles) and be divided into three branches.

The conduit will stretch for 1,080 kilometers (670 miles) from Camisea to Ilo, located in the southern Peruvian region of Moquegua, where a petrochemical hub is to be established.