October 8, 2008
Conduit Capital Wins $1.4 Billion Concession in Peru to Build a 700 Mile Natural Gas Pipeline
Conduit Capital Partners LLC, a private equity investment firm focused on infrastructure investment and development in Latin America and the Caribbean, today announced that its subsidiary, Kuntur Transportadora de Gas, S.A.C. ("Kuntur"), has been awarded a 30-year concession contract by the Government of Peru to build a 700 mile pipeline that will carry natural gas from the Camisea gas fields to the port of Ilo in Southern Peru. Development and construction costs for the pipeline, known as the Gasoducto Andino del Sur (GAS), are estimated to be $1.4 billion.
To secure the concession, Conduit presented a construction completion bond for $68 million earlier in September. Conduit Chairman J. Scott Swensen and Samuel D. Gomez, a partner at the firm and President of the Kuntur Board of Directors, attended a ceremony at the Presidential Palace in Lima on Friday, October 3, 2008, where Peru's President Alan Garcia officially announced the concession had been awarded to Kuntur. Official signing of the concession contract took place on October 6th, in the cities of Cuzco, Arequipa and Ilo, which are three of the main cities along the proposed pipeline route, between the Government of Peru, represented by President Garcia, and Mr. Gomez.The pipeline will deliver attractively priced gas that is expected to help spur economic growth in Peru's Southern region, which will begin facing power shortages as soon as 2011.
"We are very pleased to be awarded this significant development project," said Mr. Swensen. "This project comes with the broadest support at all levels in Peru, since it has a strong social component and benefits a great number of the most economically depressed areas in the country. We plan to combine our experience in developing projects in the region with that of local and strategic partners to make this project a reality and provide a clean, cheap source of energy to this region of Peru that desperately needs it."
Conduit now begins the full development of the project, including the signing of firm off-take contracts, environmental studies, detailed engineering, financial structuring and the incorporation of additional equity participants. Construction is expected to begin in 2010 and the pipeline should be operational by the end of 2012.
Conduit's involvement with this project dates back to 2007, when the firm committed the funds to determine whether a pipeline would have economic benefits for the people of Southern Peru. An optimal route was then chosen based on comprehensive preliminary technical and environmental studies. Kuntur presented its application to Peru's Ministry of Energy and Mines in March, 2008, and the proposal was successfully reviewed by the Ministry and the municipalities through which it would cross.
About Conduit Capital Partners www.conduitcap.com
Based in New York City, Conduit Capital Partners, LLC is a private investment firm focused exclusively on infrastructure investment and development in Latin America and the Caribbean. Through its management of the Latin Power Funds, Conduit has made investments in Mexico, Chile, Peru, Brazil, Argentina, Colombia, Jamaica, Honduras and Guatemala. Founded in 1993, Latin Power I was the first private equity fund exclusively dedicated to infrastructure investments. Conduit is presently investing its $393 million Latin Power III fund.
About Kuntur Transportadora de Gas www.ktg.com.pe
Kuntur is an investment vehicle fully controlled by Latin Power III through its Cayman's subsidiary, Cusco Pipelines, LTD. Kuntur presented an application for a 30-year concession to build and operate the Gasoducto Andino del Sur (GAS) on March 14, 2008; the application was formally admitted on April 7, 2008 and the oppositions period was completed free of any objections on April 28, 2008. The Ministry of Energy and Mines officially announced that Kuntur's application had been approved on July 7, 2008. The Concession was awarded on September 16 and official signing took place on October 6, 2008 in Cuzco, Arequipa and Ilo.