Government proposes that construction of the South Gas Pipeline begin in the second half of 2023

The Multisectoral Commission in charge of the renegotiation of the Camisea gas contract today presented its Final report with the proposals and conclusions to expand natural gas reserves and strengthen the hydrocarbon industry for the mass use of this resource. It should be noted that this commission is not responsible for directly negotiating the contract with Pluspetrol, but for issuing a report that can serve the Executive in this case.

In order to support the internal demand in the process of massification of natural gas, the commission chaired by the PCM and the Minem considers that the best alternative to take the resource is the “Inland gas pipeline”, which has been developed in accordance with the layout of the former Gasoducto Sur Peruano (GSP) project. This would generate less time in the development and execution of the SIT Gas Project.

It also confirms, based on studies by the international consulting firm Mott MacDonald, the solvency of reusing the Odebrecht tubes left behind when the GSP was cancelled. Only the care of these pipelines will cost this year more than S / 172 million to the Peruvian State.

In this sense, it proposes that the SIT-Gas be declared of national interest and that the feasibility of seeking its execution be evaluated from the existing works and assets of the GSP through the viable alternative of greater efficiency. Likewise, it is requested to establish the creation of a Commission whose purpose is to follow up on the progress in the execution of the project, as well as to generate proposals and recommendations that allow the responsible entities to make better decisions.

“If the engineering of the former GSP Project were not used, Stage II of the Preinvestment Study would be extended by 2 years; if the EIA of the former GSP Project was not used, the start of construction would be delayed by an additional 2 years; while, if the assets of the former GSP Project were not used, the construction would be extended in 3 more years”, he refers.

Under these considerations and assuming that the disposition of the assets can be resolved in the year 2022, the construction could start in the second half of 2023, with the commissioning of the system by milestones in the years 2024 (Cusco), 2025 ( Apurímac, Puno) and 2026 (Arequipa, Moquegua, Tacna). This latest milestone can be brought forward to 2025 through an intensive allocation of construction resources.

Also, under the Co-financed APP (other proposals were handled, such as public works or financed PPPs), the award to the Concessionaire could take place in the second half of 2025 and the execution could begin in 2026, with partial operations beginning in 2027 and its culmination and full operation in 2029.

“The Minem must carry out the corresponding actions for the use of the assets of the old concession,” the document states.