Deadline not met for Peruvian Southern Gas pipeline financial closing
Published by Stephanie Roker,
Editor
World Pipelines,
As it is known, the concessionaire in charge of the Peruvian Southern Gas pipeline project has been working for months to make the financial closing feasible and allow the project to continue its course. The deadline to reach this is 23 January. However, as a matter of public knowledge, one requirement to achieve the financial closing was that Odebrecht had to sell its shares in the project, which has not yet occurred.
On 20 January, it was confirmed that the financial closing will not occur before 23 January, which is the deadline that had been stipulated in the contract. Therefore, the Peruvian Government is entitled to terminate the concession contract, whose shareholders are Odebrecht (55%), Enagás (25%) and Graña y Montero (20%).
The next step will be to carry out a bidding process for the concession, with GSP having the right to receive the amount obtained from the auction, being 72.25% of the Net Book Value (total amount invested in the project) the minimum to receive.
Likewise, the concession contract states that the termination of the contract entails the execution of a Performance Guarantee, which amounts to US$262 500 000, of which our subsidiary Negocios de Gas S.A. is responsible for 20%. This amount is equivalent to US$52 500 000.
Graña y Montero estimates that it could recover a significant percentage of the investment made in the Southern Gas pipeline project, in an estimated maximum term of three years.
As it is known, Graña y Montero entered the project 15 months after the awarding took place. This was achieved through an increase in capital which allowed it to acquire a 20% stake in the project, with the objective of reducing Odebrecht's participation due to the problems it faced in Brazil.
"Our interest when joining the Southern Gas pipeline project was for the project to materialise, since it is very important for the development of the country's energy system and it is a strategic business commitment for the group," said Mario Alvarado Pflucker.
He also added that Graña y Montero will continue betting on energy projects in Peru and the region, as it is one of the resources that are most needed to boost development.
Read the article online at: https://www.worldpipelines.com/business-news/24012017/deadline-not-met-for-peruvian-southern-gas-pipeline-financial-closing/
You might also like
Vallourec wins fourth major line pipe order from ExxonMobil Guyana
Vallourec wins another major order from ExxonMobil Guyana.