Bloomberg News

Peru Tightens Security to Restart TGP Pipeline Expansion

February 15, 2013

Transportadora de Gas del Peru, the Andean country’s largest pipeline operator, aims to restart work on a delayed $800 million conduit expansion by April as the government beefs up security against Maoist rebels, general manager Ricardo Ferreiro said.

The government is investing $500 million in equipment and 10 new army and police bases in the southeastern jungle after guerrilla attacks last year, Ferreiro said. The Lima-based company known as TGP aims to expand the Camisea pipeline in the Cuzco region by 36 percent to 830 million cubic feet per day by the first quarter of 2015.

“These are complex issues because they take time,” Ferreiro said today at a press conference in Lima. “There are many difficulties which we’re working on, and we will only restart work if security conditions improve.”

The government is counting on TGP to supply gas to petrochemical projects being developed by Orica Ltd. and Sigdo Koppers SA and power plants and pipelines. The projects are part of $16 billion in energy investments expected over the next decade, according to the country’s Energy Ministry.

TGP, a seven-company group whose shareholders include Dallas-based Hunt Oil Co., hasn’t received any specific threats from the Shining Path movement after the U.S. State Department this week warned U.S. citizens risked being kidnapped in the Cuzco area, Ferreiro said. The pipeline runs through the Cuzco region.

The group, which began its insurgency in 1980, last year blew up helicopters and kidnapped employees working on the pipeline, delaying the project by a year and threatening $1.5 billion in annual gas exports and 40 percent of the country’s power supply.

Sara Alcantara, a Lima-based spokeswoman for the Peruvian Defense Ministry, didn’t immediately return a telephone call seeking comment.

To contact the reporter on this story: Alex Emery in Lima at aemery1@bloomberg.net.

To contact the editor responsible for this story: James Attwood at jattwood3@bloomberg.net


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