January 23, 2017 / 2:55 PM / a year ago

Peru says it plans to terminate Odebrecht pipeline contract

LIMA, Jan 23 (Reuters) - Peru said Monday that it plans to terminate Brazilian engineering conglomerate Odebrecht’s $5 billion natural gas pipeline contract after it said it would miss a key financing deadline for the project.

Energy and Mines Minister Gonzalo Tamayo added on local broadcaster RPP that the government would assess the value of the partially-built project and schedule a new auction as soon as possible.

The Odebrecht-led consortium that won the rights to build the pipeline in 2014 announced on Friday that it would not be able to meet a financing deadline this week and was waiting for notification to begin the process of returning the contract to the state.

Odebrecht controls a 55 percent stake in the project, Spain’s Enagas SA has a 25 percent stake and Peru’s biggest construction group Grana y Montero owns 20 percent.

Reporting By Mitra Taj, Editing by Franklin Paul

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