Pipelines and permits in Peru

Peru is a challenging market for environmental permitting processes, with many ecological zones, difficult bureaucracy and numerous archaeological and cultural sites that must be protected. With a mega-project such as the Southern Peru Gas Pipeline, the sheer volume of permits required and the immense route that needs to be surveyed for potential risks could be off-putting to many investors.
However, both environmental consultancies and construction companies, which possess extensive experience in the market, have learned to navigate the complexities of these processes, taking lessons from previous efforts, including the Transportadora de Gas del Perú pipeline.

NAVIGATE BUREAUCRACY: While the exact number is still being calculated, the entire span of the GSP is expected to require more than 1,000 distinct government permits. Many of these are related solely to construction and not to the environmental aspects of the project. However, the environmental permits can be some of the most complex, due to the numerous agencies and bodies that oversee them and the many diverse topics covered.
Special permits must be acquired for water uptake and discharge from camps, for hydrostatic testing and then, for the pipeline’s operations.
The variety of government agencies involved in the process presents further complications. While the Ministry of Energy and Mines will provide approval for the bulk of the project’s permits, the environmental assessment will also have to pass through the Ministry of Environment.
In addition, the National Water Authority and Ministry of Agriculture will have to weigh in on issues related to their purviews. The Ministry of Culture, too, must be consulted regarding potential implications for archaeological and cultural monuments. Finally, authorisation from the Port Authority is required for organising the transport of goods via rivers to worksites in the Amazon.

CUT THE RED TAPE: Walsh and the Gasoducto Sur Peruano consortium are already working to find ways to streamline the permitting process and cut down processing times as much as possible. By getting permission to use the environmental licence previously granted to the now-defunct Kuntur Transportadora de Gas consortium, as much as two years has been saved, and Walsh is now concentrating on the 150-kilometre branches of the pipeline that are not included in the Kuntur licence. Additionally, the new law on Environmental Regulation in the Hydrocarbons Sector, approved in November 2013 by the Ministry of Energy and Mines and the Ministry of Environment, allows projects to pass through many phases of the permitting process contemporaneously, which could save more time.

ANTICIPATE CHANGES: An important part of building a major pipeline is being able to anticipate changes that will inevitably be necessary. While the route of the GSP has largely been determined, as construction actually proceeds, there will be areas where the course of the pipeline will have to be diverted to avoid populated areas or environmental hazards.
Walsh will also be responsible for identifying risks to the pipeline, such as areas prone to landslides or flooding, and finding ways to mitigate these risks via construction modification or landscaping efforts, such as the construction of retaining walls.
The Transportadora de Gas del Perú consortium’s 720-kilometre Camisea-Callao pipeline suffered several leaks early in its operations due to earth movements. This is something that can hopefully be avoided in the GSP by learning from the mistakes of previous projects and monitoring for landslide risks and any construction conducted in close proximity to the pipe.

WORK WITH COMMUNITIES: There must be clear lines of communication with local communities residing along the course of the pipeline, not only to make sure that they understand the benefits of the project and do not object, but also to get their input. Locals know the environment that they live in better than anyone, and can provide important advice for preparing our assessment.
In the past, Walsh has hired local experts to provide counsel on regional flora and fauna, enabling the company to better understand how the area will be affected by construction. The permitting and assessment process should be constructive and include the participation of the project sponsors, the government and the local communities.

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