Osinerg Could Sanction TGP Over Pipeline Spills in Peru

Peru's energy regulator Osinerg will hire an international consulting firm to carry out an emergency review of the Camisea project's natural gas liquids (NGLs) pipeline operated by TGP after four spills in the past 15 months, the mines and energy ministry said in a statement.

Osinerg could fine TGP, force it to adopt certain measures or even revoke its concession license, energy and mines ministry advisor Mario Nicolini told BNamericas.

TGP "could be fined and, worst comes to worst TGP could lose their concession. That's a remote possibility, but it is [a possibility]," Nicolini said.

Osinerg is expected to choose the consulting firm to carry out the review within two weeks and the results of the study are expected within 8-10 months, the statement said.

The regulator will decide on the sanctions to be applied based on the results of the review, Nicolini said.

Meanwhile, TGP plans to invest US$20mn-US$30mn on improvements such as a system to detect failures as well as setting up stations along the pipeline to respond to emergencies quickly and installing more valves, CEO Alejandro Segret said in the statement.

In early November, a Peruvian government source told BNamericas that problems on the Camisea pipeline could be due to the TGP consortium having used low quality materials to cut costs in its construction, but Segret denied this allegation, saying landslides were the main cause of the incidents.

The ministry downplayed the four incidents on the Camisea pipeline, saying that such leaks are normal in the first two years of operation of a new pipeline.

"Later [the pipeline] stabilizes and finally, toward the end of its useful life, when the materials begin to corrode and deteriorate, incidents appear again incrementally," the statement said.

But local people are losing patience with TGP and the frequency of the leaks. The latest spill occurred on November 24 in a tributary of the Urubamba river in the Machiguenga reserve, leaking about 6,000 barrels of liquids, environmental NGO Amazon Watch said in a statement.

As a result, Machiguenga Indians blockaded the Urubamba river for several days to prevent construction of the project's second stage, the statement said.

Officials from the energy and mines ministry led by deputy energy and mines minister Juan Miguel Cayo traveled to Bajo Urubamba on Sunday in an attempt to negotiate with the protesters, Nicolini said.

TGP is led by Argentine construction firm Techint, which has a 23.4% stake in the pipeline. Other partners are Argentina's Pluspetrol and US company Hunt (22.2% each), South Korea's SK and Algeria's Sonatrach (11.1% each), Belgium's Tractebel (8%) and Peruvian construction company Grana y Montero (2%).

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