Peru’s TGP looks to extend gas concession beyond 2033

Transportadora de Gas del Perú (TGP), which transports Camisea natural gas and natural gas liquids to the coast from the Amazon, requested an extension of its 33-year concession.

TGP looks to renew the build, own, operate and transfer contract by 10 years starting on January 8, 2034, according to a draft addendum released by the energy and mines ministry.

The contract may be renewed in 10-year increments, to a maximum cumulative concession period of 60 years.

As part of the extension, the company has pledged new investments, including a new pipeline branch from Ica to Arequipa and Moquegua, to increase capacity by 80Mf3/d to 1Bf3/d.

See the addendum in the Documents box in the top-right corner.

At its 20-year anniversary, TGP said it transports over 40% of the gas used to generate power in Peru, and that the gas benefits 1.9 million homes, 6,500 businesses and industries, and 400,000 vehicles.

Fitch Ratings recently affirmed TGP’s long-term foreign and local currency issuer default ratings, and the operator’s US$850mn unsecured notes due in 2028 at 'BBB+'. The outlook on the IDRs is negative.

“TGP's ratings reflect its solid financial profile, strong capital structure and stable and predictable cash flows, supported by long-term, fixed, ship-or-pay agreements with strong credit quality off-takers,” according to Fitch, which added, however, that Peru’s “weak systemic governance” impacts the operating environment.

Also read Forecast sees congestion risk for Peru’s Camisea gas duct and Beyond power producers: Peru’s other natural gas offtakers

Source: TGP