Peru to build new natural gas pipeline

Peru plans to award a concession in the third-quarter to build and operate a natural-gas pipeline that the government says is key to improving energy security in the Andean country.

Government investment agency ProInversion, which is responsible for overseeing the tender, said that the concession will be for 20 years. It plans to call bids for the project in the first quarter of this year, the agency said.

ProInversion said the project, known as the Southern Peruvian Gas Pipeline, could require an investment of US$2.87 billion, which is higher than the original forecast.

Mines and Energy Minister Jorge Merino said last year that he expected it would need an investment of US$1.8 billion.

According to local media, the pipeline would transport natural gas from Peru's southeastern jungle region to the country's southern Pacific coast. It could also be used to develop a petrochemical complex.

The government has said the project is important to ensure energy security. Currently, about 50% of the feedstock for the nation's electricity generation depends on a single pipeline that transports gas from the Camisea fields to the coast.