News Post
Tecnicas Reunidas nears $2.7 billion deal to build new refinery in Peru
Tecnicas Reunidas SA probably will be awarded a $2.7 billion contract in Peru to build a
refinery for state-owned oil company Petroleos del Peru SA, the country’s Finance Minister Miguel Castilla said.
“The contract is likely to be signed in the coming weeks,” Castilla said in an interview at the World Economic Forum in Davos. The company gained as much as 1.7% in Madrid trading, headed to snap five days of declines.
Peru is expanding and refurbishing its infrastructure from transportation to telecommunications as an increase of tax revenue has allowed the government to post a budget surplus in the last three years.
“The
project likely will start in the first quarter,” Castilla said. The Spanish engineering company, which has already begun designing the complex, will carry out
construction over three to four years, he said.
Peru wants Tecnicas Reunidas to expand the Talara
refinery’s capacity to almost 100,000 bpd from 65,000 bbl currently, Castilla said. The new complex will be built in place of the existing one, meaning it’s practically a “green field”
project, the minister said.
The company expects to sign the contract in the short term, and it’s an
expansion of an existing contract, a Madrid-based official for Tecnicas Reunidas said.
Tecnicas Reunidas will raise debt to finance the
project, while the government plans to extend a guarantee on the debt for as much as $1 billion during the contract, the minister said. “This will allow for access to better borrowing conditions,” he said
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