US energy group Sempra Energy has terminated negotiations with the Peruvian government on the Gasoducto Sur Peruano gas pipeline project, without reaching an agreement.
Earlier in November 2016, Sempra Energy reached an agreement with Brazilian engineering company Odebrecht on the sale of its 55% stake in the gas pipeline project. Odebrecht, currently involved in a large corruption case in Brazil, had to divest its stake in the project to enable a US$4.1bn syndicated loan for the US$5bn project. The Peruvian government was unable to provide necessary assurances that the concession would not be cancelled due to alleged legal violations by the seller or its affiliates, inciting Sempra to cancel the transaction. Techint Group would still be in negotiations with Odrebrecht for the acquisition of this stake. Peru plans to organise a new auction for the project in 2017, if Odebrecht fails to sell its stake.
The Gasoducto Sur Peruano gas pipeline will stretch over 1,080 km from Camisea (Cusco) to a new petrochemical complex to be built in Ilo (Moquegua), near the Chilean border. The consortium planned to invest between US$3.6bn and US$4bn in the construction and will charge US$7.3bn for services offered during the 34-year concession.