Peru extends timetable for gas concession call

Peru’s investment promotion agency ProInversión has again extended the bidding timetable for the concession to distribute natural gas in seven southeast regions.

Offers for the 32-year contract had been due on March 19 but are now scheduled to be received 30 calendar days after the final contract version is sent to potential bidders on April 23.

ProInversión also published changes to the contract's final version, subject to review by the competent authorities. 

Previously, Cálidda, which distributes natural gas to capital Lima and neighboring port city Callao, Consorcio Wapsi Perú (LNG Holding-China Gezhouba Group) and Bolivia's state hydrocarbons company YPFB qualified to participate.

The concession would span Apurímac, Ayacucho, Huancavelica, Junín, Cusco, Puno and Ucayali.

Estimated capex is US$200mn and the minimum work plan calls for a little over 113,000 connections in eight years, with supply to come from LNG, CNG and/or piping connected to a transport or production system.

Critics, however, point to the lack of an industrial base in the coverage area and the need for greater clarity regarding gas availability and rates.

In addition, the pandemic has impacted the call – issued in 2014 – and in September the qualifiers requested an extension due to COVID-19.

“We do not want to go through the Arequipa, Moquegua, Tacna model, we want a more profitable process,” Cusco region governor Jean Paul Benavente Garcia said in recent days during a discussion on energy security.

Benavente made the comment in reference to Naturgy’s withdrawal from its gas distribution for the three regions that is now being temporarily managed by state oil company Petroperú.

Regarding the drawn-out process, fellow panelist and former Petroperú head Humberto Campodónico said “there is not a sufficient amount of economic profitability for this, it has to be approached by the state as a project for drinking water, for electricity.”

In recent weeks, the government approved the use of social energy inclusion fund FISE for new gas distribution infrastructure.

Also read Camisea mechanism pitched for new Peru gas concessions and New residential gas connections in Peru to top 100k in H1