Conduit exits $1.5bn Peruvian gas pipeline

Conduit Capital Partners divested its final piece of Gasoducto Andina del Sur, selling the pipeline project to Odebrecht. The private equity firm became sole owner of the project in 2008.

Conduit Capital Partners has sold its remaining interest in Gasoducto Andina del Sur – a 1,100- kilometre gas pipeline project commonly called Kuntur – for an undisclosed sum, Conduit said in a statement. 
 
The sale, to Brazil-based construction and engineering concern Odebrecht, concluded a four-year proprietorship for Conduit.

New York-headquartered Conduit, a private equity firm focused on energy infrastructure in the Caribbean and Latin America, made its initial investment in Kuntur in 2008, winning a 30-year concession agreement with the government of Peru. The project at the time was valued at $1.5 billion.  
 
Kuntur represented the largest investment for Latin Power III, a Conduit private equity vehicle. Conduit invested $94 million in the project via Latin Power III, acquiring full ownership of Kuntur. The pipeline was conceived to transport natural gas in the southern region of Peru.
 
Conduit began divesting its stake in Kuntur in 2010, offloading 51 percent of the project to Odebrecht. That transaction was followed by Conduit's exit from another Peruvian business, when it sold its 7 percent of Lima-headquartered power generation firm Edegel for $50 million. Conduit had paid $21 million for the Peruvian energy firm in 2002.

Formal construction of Kuntur began in 2011. For Odebrecht, the project marked a significant inroad to researching how much natural gas was available in Peru. 
 
Conduit in its statement did not reveal its rationale for selling off its ownership in Kuntur. It did note it had “added significant value” to the project, while citing Odebrecht as a capable owner.