“The information contained in
this document in relation to the
development of Transportadora de
Gas del Perú S.A. during 2013 is
true and correct. Notwithstanding
the liability of the issuer, the
undersigned shall be responsible
for the contents of this document
according to the applicable legal
rules.”
Ricardo Ferreiro
General Manager
Lima, March 12 ,2014
Table of Contents
The Company
6
General Data
6
The Company
8
Main Assets
8
Relation with the Government
9
Our Managers
10
Our Directors
12
Our Shareholders
14
Gas Sector
Macroeconomic Context
15
15
Much more than expected: benefits of Camisea
19
Market Development
20
Natural Gas Transportation
20
Natural Gas Liquids Transportation
22
Gas transport is our task. Transporting it properly, our commitment
22
Bigger Responsibilities in a new scenario
23
Safety First
24
Responsible and Inclusive
26
Respectful with the Environment
28
The Expansions
31
In the legal framework
32
Management Analysis
32
Annual Report 2013
The
Company
General Data
/6
Name
Address
Telephone, Fax, Web
Transportadora
de Gas del Perú S.A. (TgP).
Víctor Andrés Belaúnde 147.
Centro Empresarial Real.
Torre Real 3, Office 501.
San Isidro, Lima 27.
617-7777
Fax: 617-7725
www.TgP.com.pe
Date
of Incorporation
Registration
CIIU
November 02nd, 2000.
File 11227891 of the Register
of Legal Entities of the Registry
Office of Lima and Callao.
Pipeline transportation
(code: 60302).
Purpose
Economic Group
Duration
/7
The transport of natural gas and
natural gas liquids by pipelines
and the distribution of natural
gas by pipeline networks;
construction and erection, civil
engineering work in particular,
design, supply of goods and
services for the construction,
operation, maintenance and
repair of the network of such
pipelines, construction of other
infrastructure and installations
necessary for the provision of
public transport services by
pipelines of natural gas and
natural gas liquids and the
distribution of natural gas by
pipeline networks and any related
activity, whether by public or
private concession.
TgP is not part of any
economic group.
Capital Stock
Total of 208’300,000 voting
registered stocks, created, issued,
subscribed and paid-up. Each
stock has a face value of US$ 1.00.
Indefinite.
Annual Report 2013
The
Company
TgP is the concessionaire responsible for the
transportation of natural gas (NG) and natural
gas liquids (NGL) from Camisea fields in the
forest to the Peruvian coast: Pisco for NGL and
Lurín for NG.
As part of its corporate policy, Transportadora
de Gas del Perú aims to perform efficiently and
safely, the transportation of natural gas and its
liquids to the industries and from Cusco’s jungle
sector to the coast going through 4800 MAMSL
in the Peruvian highlands. This compromise
began on December 6th 2000, date in which
both concessions were granted to TGP by the
Energy and Mining Ministry, for a 33-year period,
starting on the subscription date, which can be
extended to a maximum of 60 years.
/8
The stockholders of TgP are: Tecgas NV, Tecgas
Camisea S.A., Hunt Pipeline Company of
Peru Ltd., Sipco Peru Pipelines Corporation,
Carmen Corporation, SK Innovation Co., Ltd,
International Power S.A., Graña y Montero S.A.A.
and Corporación Financiera de Inversiones S.A.A.
Tecgas NV is the strategic operator under the
BOOT (Build Own Operate Transfer) contracts.
Main
Assets
From January 2002 to August 2004, when
the company’s operations started, 729 Km of
pipelines were built for the natural gas to flow
from Camisea to the City Gate in Lurín, and a
557 Km pipeline for the natural gas liquids to
flow to the fractionation plant in Pisco. To these
it was added the construction of the compressor
plant built in the Highlands sector and the
parallel pipeline (loop) of 105 Km installed in
Coast.
To accompany the
country’s energy
development,
we build a base
of responsible
policies.
In case of the gas pipeline the section of the
Coast Loop, the Malvinas compression station,
and the compression plant in the Highlands
sector boost the flow of natural gas to its
destination. And, for natural gas liquids, four
pump stations, which originally were composed
of three bombs each one. Then in 2011 a fourth
pump was added to each PS (Pump Station).
Later in 2012 a fifth pump was added to the
PS1 (Jungle Sector). In addition to this, the
Pipeline Transportation System has three
pressure reduction stations that control the flow
along its route. The gas and liquid flows, as well
as the facilities, are controlled, automatically
and in real time, by the Supervisory Control
and Data Acquisition (SCADA), which makes
a continuous follow-up through the control
room in Lurín. It is worth mentioning that TgP’s
assets are the ones that constitute the Pipelines
Transportation System of Natural Gas from
Camisea to City Gate in Lima and the Pipelines
Transportation System of Natural Gas Liquids
from Camisea to the Coast, both, jointly with
the respective Concession, regulated through
the “BOOT Concessions”, subscribed with the
Peruvian State.
We carry out our activities convinced that
environmental protection, safety of people we
worked with, and neighboring communities
are the bases of a responsible policy to build
the energy development of a country. We
take on the responsibility of contributing with
the local economic progress, cooperating
to the improvement of life standard of the
transportation system’s neighbor communities.
Our actions have a participatory approach
so that the benefits of our activities continue
beyond our presence and permanence in the
Camisea project.
Relation with the
Government
As a company of the hydrocarbon sector and as
a concessionaire of Natural gas and Natural Gas
Liquids transportation system of Camisea, TGP
maintains a constant communication with the
Ministry of Energy and Mines (MEM – Spanish
acronyms for Ministerio de Energía y Minas), the
Supervisory Organism for Investment in Energy
and Mines (OSINERGMIN - Spanish acronyms for
Organismo Supervisor de la Inversión en Energía
y Minería), Ministry of Environment (MINAM –
Spanish acronyms for Ministerio del Ambiente)
and his related agency, the Environmental
Evaluation and Control Organism
(OEFA – Spanish acronyms for Organismo de
Supervisión y Fiscalización Ambiental ) and
several public organism.
In this context, Hydrocarbon General Direction
(DGH – Spanish acronyms for Dirección General
de Hidrocarburos) of MEM plays a normative
and promoting role for hydrocarbon sector.
DGH signed with TgP the concession
Agreements for Natural Gas and Natural
Gas Liquids transportation of Camisea (the
BOOT contracts). Furthermore, MEM’s General
Direction of Energetic and Environmental Affairs
(DGAAE – Spanish acronyms for Dirección
General de Asuntos Ambientales Energéticos)
is a technical and normative organism
responsible for promoting the execution and
promulgation of environmental laws for energy
related activities (comprising hydrocarbons and
electricity). In this regard, DGAAE is in charge
of creating conditions for such operations
to be aligned to the Peruvian’s sustainable
development. TgP has obtained many
environmental approvals from DGAAE, which
are necessary to develop its activities.
Regard to MINAM, OEFA plays the role of
technical specialized organism, which is
in charge of evaluating and control the
enforcement of the environmental normativity
by the companies, including the ones that
belong to the energy subsector.
Regarding OSINERGMIN, TgP’s activities are
regulated by Natural Gas Control Management
(GFGN – Spanish acronyms for Gerencia de
Fiscalización de Gas Natural).
GFGN is responsible for directing, coordinating
and controlling the process of supervision
and control of the activities developed by the
company, as well as controlling the permanent
compliance of contractual commitments
assumed in the BOOT contracts signed by TgP.
/9
Annual Report 2013
Our
Managers
Year
2007
Officers
Employees
5
Workers
Total
-
16
11
Officers
Variation
Employees
Variation
-
-1
2008
5
11
-
16
-
-
2009
5
12
-
17
-
1
2010
5
12
-
17
-
-
2011
5
11
-
16
-
-1
2012
4
12
-
16
-
1
2013
4
11
-
15
-
-1
Salaries of Directors and Managers (% on gross income)
0.3%
Note: All personnel is permanent
/10
Ricardo Ferreiro
Tomás Delgado
General Manager of Transportadora de Gas del
Perú since April 2006.
Administration and Finance Manager of
Transportadora de Gas del Perú since January
2005.
Mechanical Engineer, Universidad Nacional de
La Plata.
He has been working for 22 years in the
hydrocarbons industry in Tecpetrol (Techint
Corporation), in which he has taken different
responsibilities. He started as a Production and
Plant Supervisor in the Aguarigües operation
(north of Argentina). He also was responsible
for the operation of wells, gas and petroleum
treatment plants, gas and oil pipelines, gas
reinjection plant of the Campo Durán and
Aguaragüe deposits in Argentina, between
1992 and 1996.
From 1996 to 2005, he worked as the Production
and Facilities Manager of Tecpetrol in Venezuela,
then as Operation manager and finally as
General Manager of Tecpetrol of Venezuela until
2005. Since 2006, he has been working as the
General Manager of Transportadora de Gas del
Perú.
Ricardo is the Director of AFIN (by its acronym
in Spanish Asociación para el Fomento de
la infraestructura Nacional), member of the
Directors Committee of SNMPE, member of the
Organizing Committee of INGEPET.
Vice-president of SNMPE, and President of the
Sectorial Committee of Hydrocarbons of SNMPE.
Mechanical Engineer, Universidad Simón
Bolívar, Venezuela. Master in Business
Administration, Instituto de Estudios Superiores
de Administración (IESA), graduated with
honors.
Manager of Administration and Finance in
Credicard from 1988 to 1990. Then, he was
Finance Manager of Banco Mercantil, one
of the largest financial institutions of the
Venezuelan market. In 1997, he was Project
Manager of Siderúrgica Venezolana SA
(Sivensa), where he was responsible for the
creation of a joint-venture with the oil company
Amoco for the exploitation of an oil field,
being in charge of the economic model of
evaluation and negotiation of the stockholders’
resolutions and operation agreements. He
was also responsible for the evaluation of
the privatization of Siderúrgica del Orinoco
(Sidor) and became Finance Manager in 1998.
In his capacity, he was also responsible for
the management of the company’s financial
strategy, including its debt restructuring for
approximately US$ 1,500 million.
Rafael Guarderas
Manager of Institutional Relations and Social
Management of Transportadora de Gas del Perú
S.A. (TgP) since October 2004. Administration
and Finance Manager of Transportadora de Gas
del Perú from 2001 to September 2004.
Master in Business Administration (MBA) from
Escuela Superior de Administración de Negocios
para Graduados (ESAN); complementary
studies in Finances; Postgraduate in System
Engineering; graduated from the Peruvian Navy
Academy.
He began his professional career in 1984 as Navy
Official, where he spent 12 years performing in
different areas such as Administration, Logistics,
Finances and System Engineering. In 1995,
he joined Class Point S.A., a company retailer
where he worked as Administration and Finance
Manager, Deputy Manager to the General
Management.
He joined TgP in 2001, where he was the
Administration and Finance Manager; he was
also in charge of the Systems, Logistics and
Human Resources areas, during the construction
phase.
Renzo Viani
Legal Manager of Transportadora de Gas del
Perú since May, 2002.
Attorney at Law graduated at Pontificia
Universidad Católica del Perú (PUCP) in August
1988. Master in Economic International Law at
the School of Graduates of PUCP (1995 - 1996).
He started working as an attorney at the law
firm Estudio Javier Alva Orlandini. From 1992
to 1995, he was Legal Manager of Daewoo
Perú S.A. Then, he worked during three years
as partner of the law firm Estudio Mendoza,
Carrizales y Viani. Since 1998, he was legal
counsel of the Peruvian Government in the
special committee for the delivery of the
concession of Camisea Project, and providing
consulting to the Energy and Mining Ministry,
Copri (today Proinversión) and Perupetro
until 2001. He was the director of the mining
company Bayóvar. From 2001 to 2002, was
associate attorney of the law firm Muñiz,
Forsyth, Ramírez, Pérez Taiman & Olaya
Abogados, in the energy area. During the same
period of time, he was National Attorney-in-fact
of the oil company Syntroleum Corporation,
Peruvian branch, holder of the license contract
for Block Z-1. Author of several articles in
specialized journals about regulation on
transportation of natural gas.
He participated as a lecturer at the annual
university extension courses from OSINERGMIN
and post graduate courses of the Pontificia
Universidad Católica del Perú in the area of
regulation of natural gas. He has been a lecturer
in the V and VII Mining, Hydrocarbons and
Electricity International Law Congress organized
by SNMPE (Sociedad Nacional de Minería,
Petróleo y Energía). He has been a lecturer
at the Hidrocarbons Management Diploma
from ESAN University. He is a member of the
Legal Committee of AFIN (Asociación para el
Fomento de la Infraestructura Nacional) and the
Hidrocarbons Legal Committee of SNMPE.
/11
Annual Report 2013
Our
Directors
Directors
#
Non independant directors
7
Independant directors
-
Total
7
Ricardo Markous
Chairman of the Board of Directors of
Transportadora de Gas del Perú since
November 2000 and General Director of
Gas & Power area of Tecpetrol.
/12
Civil Engineer with specialization in hydraulics,
graduated from Universidad de Buenos Aires.
Postgraduate in Management at Stanford
University, Graduate Business School, California.
Since 1980, he has held several executive
positions within the Techint Organization.
He is a member of the Board of Transportadora
de Gas del Norte S.A. (TGN), Tecpetrol S.A. and
Litoral Gas S.A.
German Jimenez Vega
Country Manager of Pluspetrol since July
2011, with responsibilities over the business of
Pluspetrol Norte S.A., operators of Block 8 and
Block 1AB, Pluspetrol Perú Corporation S.A.,
Camisea’s consortium operators and Pluspetrol
E&P.
Director of Transportadora de Gas del Perú since
August 2012.
Director of Pluspetrol Perú Corporatión,
Pluspetrol Norte, Pluspetrol E&P, Pluspetrol
Camisea and Pluspetrol Lote 56 since August
2012.
He is a mechanical engineer from Pontificia
Universidad Católica del Perú and has a master’s
degree in Business Administration by the
Massachusetts Institute of Technology – MIT, in
the United States.
Possesses over twenty years of experience in the
Energy sector and has developed his career in
many countries from North and South America.
His last positions were based in Houston, as
Senior Manager of Merger and Acquisition for
the Americas and Senior Manager of Business
and Strategies. Also, he is Director of Pamer
Corporation since 2011.
Dennis Grindinger
Director of Transportadora de Gas del Perú
since November 2013.
Executive Vice President of Hunt Oil Company,
South America.
As executive vice president of South America
for Hunt Oil Company, Dennis Grindinger is
responsible for several areas, as exploration
operations in connection with the Wandari
project in the Peruvian provinces of Manu
and Tambopata, along the Camisea gas trend;
development and production of oil and gas from
operations in the Camisea area of Peru including
the associated transport of the crude oil and gas
along the Transportadora de Gas del Peru; and
LNG operations at the 4.2 ton gas liquefaction
plant, located 170 kilometers South of Lima at
Pampa Melchorita, as well as the associated
marine loading facilities and a 408-kilometer
(254 mile) gas pipeline connecting the plant to
the existing TGP pipeline.
Grindinger joined Hunt Oil Company on January
1, 2001, and for eight years served as its general
counsel. For the next six years, Grindinger served
as Hunt's chief financial officer. Prior to joining
Hunt, Grindinger was a partner with Thompson
& Knight, a leading Texas law firm.
He earned a bachelor’s degree in business
administration, specializing in finance, from the
University of Notre Dame, and a Juris doctor
from Southern Methodist University.
Karim Ait Said
Director of Transportadora de Gas del Perú
since November 2012.
Engineer in Hydrocarbons Economics since
1989 and Master in Business Administration
(EDHEC - Lille – France) since 2005.
He started his professional career being in
charge of the Energy Studies & Planning at the
Algerian Energy and mining Ministry in 1989.
After four years he began working as a Planning
and Economy Studies Manager at Sonatrach
Transportation Segment. Then in 2006 he
became Vice President of MEDGAZ (Company
in charge of the construction and operation of
the Natural Gas pipeline between Argelia and
Spain).
Finally in September 2011, he became General
Manager of Sonatrach Peru Corporation.
Hernando Graña
Director of Transportadora de Gas del Perú
since November 2000.
Industrial Engineer, graduated from Texas
A & M University. Postgraduate studies in Mine
Engineering, University of Minnesota, USA.
Director of IPAE from 1988 to 1990. Director of
Capeco since 1986 and Second Vice-president
of AFIN. Director of Graña y Montero S.A.A. since
1996, Chairman of the Board of Directors of GyM
S.A., Director of GMI S.A, and GMP and Chairman
of the Board of Directors of Stracon-GyM S.A.
Director of Concar S.A. from 1996 to 2011
Director of GMP from 1984 to 2002. Nowadays
director of Norvial S.A., La Chira, CAM
and Vial y Vives.
Marcelo Coppellotti
Director of Transportadora de Gas del Perú
since July 2008.
Studied Electronic Engineering at Universidad
Nacional de Rosario, Argentina. He followed
the General Management Program of CEDEP,
Fontainebleau. Began his professional trajectory
in GDF Group Suez in July of 1993, carrying out
several positions in the distribution company
Litoral Gas in Argentina.
In 1998, he began his international career
occupying the General Management of the
company Distrinor Chile, developing the
industrial market in the north region of the
country. In 1999, he assumed the General
Director position of Tractebel Digagro in
Querétaro city; Mexico and later, in 2003,
occupied the Commercial Management of
Cálidda, assuming, after year 2006, the General
Management of the mentioned Company.
Since 2007 he is the Vice-president of
Transportation & Distribution, Health,
Security & Environment for GDF SUEZ Energy
Latin America.
Tae Won Kim
Director of Transportadora de Gas del Perú
since January 2011.
Vice-president & General Manager of SK
Innovation Lima. Graduated from Korea
University (1985) and from Colorado School
of Mines (1997), with the degrees of BA in
Economics and Master of Science in Mineral
Economics.
He started his professional career in SK Energy
on 1988, having assumed multiple positions
including: Finance Manager, SK Myanmar Branch
Office, Yangon, Myanmar, Commercial Manager,
E&P Division, SK Seoul, General Manager, E&P
Business Team, SK Seoul, General Manager, Celtic
Oil (SK’s UK subsidiary), London and General
Manager, E&P Production Group, SK Seoul.
/13
Annual Report 2013
Our
Shareholders
Shareholders
Tecgas Camisea S.A.
%
47,837,748
22.9658
Nationality
Cayman Island
Hunt Pipeline Company of Peru Ltd.
46,620,101
22.3812
Cayman Island
Sonatrach
44,119,000
21.1805
Cayman Island
Carmen Corporation
25,790,101
12.3812
Cayman Island
SK Innovation Co. Ltd.
23,310,050
11.1906
Korea
International Power S.A.
16,800,000
8.0653
Belgium
Tecgas NV
1,323,000
0.6351
Netherlands Antilles
Graña y Montero S.A.A.
1,250,000
0.6001
Peru
1,250,000
0.6001
Peru
208,300,000
100.0000
Corporación Financiera de Inversiones S.A.A.
Total
/14
Number of share
During 2013, there was no change in the shareholders structure.
Holding
Number of
shareholders
Shareholding
(%)
Less than 1%
3
1.8353
Between 1% - 5%
0
0.0000
Between 5% - 10%
1
8.0653
More than 10%
5
90.0994
Total
9
100.0000
Note: All are voting shares.
1 Up to the date of the Annual Report’s elaboration, there is no sanguine relation and/or likeness among the directors and the members of TgP’s
Management, or among these and the company’s shareholders.
Gas
Sector
Macroeconomic Context
Gross Domestic Product
In 2013, Peruvian’s economy grew 5.1% according to the Peruvian Central Bank (by its acronym in
Spanish Banco Central de Reservas del Perú - BCRP). This increase in the national economy is lower
than the 5.5% growth estimated in September. This variation is explained by the decrease of private
investment and a lower private consume rate. The GDP is expected to continue its growth at rates near
to its potential level, due to the latest investment projects, mainly in the mining sector.
GDP (%var. / year)
%
10
9.9
8.7
8
GDP Latin America
6.1
6
6.9
6.3
5.1
4.3
4
/15
GDP Peru
3.9
3.0
2.5
2
0.9
0
2008
2009
-2
2010
2011
2012
2013
-2.4
-4
Source: INEI, BCRP2
Balance of Trade
Balance of Trade in 2013 showed a negative difference to exports approximately amounting to
US$ 365 million, lower than US$ 4,527 million in the prior year, representing a decrease of 108.1%
versus 2012. This effect is explained mainly by a decrease of exports in 8.4% due to the reduction of the
domestic demand and low dynamism of private investment.
2 Data from the Inflation Report – December, 2013 published in the web page of the Peruvian Central Bank (www.bcrp.gob.pe).
Annual Report 2013
Balance of Trade
50,000
Total Exports
Total Imports
Balance of Trade
Millions of US$
40,000
30,000
20,000
10,000
0
2008
2009
2010
2011
2012
2013
-10,000
Source: BCRP3
/16
Inflation
During 2013, the accumulated inflation of the year was 2.9%, above the minimum target band (2.0%
with an upper and lower deviation of 1%) of Peruvian Central Bank (by its acronym in Spanish Banco
Central de Reserva del Perú - BCRP), due to decelerated economic growth to rates below its potential,
eliminating inflationary pressures.
Inflation (%var. / year)
IPC Lima
8.0
7.0
6.0
6.7
5.0
4.7
4.0
3.0
2.0
2.6
2.1
2.9
1.0
0.2
0
2008
2009
2010
2011
2012
2013
Source: BCRP4
3, ⁴ Data from the web page of Peruvian Central Bank. (www.bcrp.gob.pe). Section “Statistics”.
Exchange Rate
As in previous years and consistent with the trend shown by other regional currencies, the Nuevo
Sol (S/.) continued to strengthen against the dollar, considering an uncertain context associated with
expectations of the withdrawal of Fed’s stimulus and reduction of commodities’ prices. A currency
depreciatory tendency developed from January to September, remaining stable through the fourth
trimester. The exchange rate showed a decrease from S/. 2.56 per U.S. dollar at the end of December
2012 to S/. 2.78 at the end of December 2013.
Nominal Exchange Rate - Average Interbank Sale
3.4
3.3
3.1
3.0
2.8
2.7
2.5
January
2008
July
2008
January
2009
July
2009
January
2010
July
2010
January
2011
July
2011
January
2012
July
2012
January
2013
July
2013
January
2014
Source: BCRP5
Country-Risk
Peru's country-risk reached 177 pbs at the end of 2013, according to the Peruvian Central Bank’s
statistics. It is worth to mention that during 2013, Standard & Poor’s and Fitch raised the credit rating
of Peru to 'BBB+'. Furthermore, Moody's Investors Service, that is another major credit rating agency,
maintained its rating of the country in Baa2.
Country Risk
800
Spread - Embi+ Perú (pbs)
700
Spread - EMBIG América Latina (pbs)
600
500
400
300
200
100
0
January July
2008
2008
January
2009
July
2009
January
2010
July
2010
January
2011
July
2011
January
2012
July
2012
January
2013
July
2013
January
2014
Source: BCRP6
5, 6 Data from the web page of the Peruvian Central Bank. (www.bcrp.gob.pe). Section “Statistics”.
/17
Annual Report 2013
Exchange Indexes
During 2013, the Lima Stock Exchange had a downward trend. At the end of the year, the General Index of
Lima Stock Exchange (GILSE), the most representative in the local exchange, decreased by 23.6%, from 20,629
points at the end of 2012 to 15,754 points at the end of 2013. Likewise, the Selective Index of Lima Stock
Exchange (SILSE), which gathers 15 leading stocks, decreased by 26%, from 31,001 to 22,878 points.
It is worth to mention that the GILSE showed several fluctuations throughout 2013, having its lower peak in
July. Regarding the sector level all showed downward trend, being the most affected agricultural and mining
sectors, which posted annual loss in excess of 40%⁷.
The amount of trading for this year was relatively lower than the previous year, as shown in the chart. The Stock
Capitalization of the Lima Stock Exchange at December 31, 2013 stood at 120,653 million dollars, decreasing
by 21.3% to the figure set last year. It is also important to note the marked decrease registered by junior shares
by 31%⁸.
25,000
25,000
20,000
20,000
15,000
15,000
10,000
10,000
5,000
5,000
Variable Interest Securities Traded Volume
(million of NSO)
GILSE
GILSE
/18
Million of US$
GILSE and Traded Volume
0
0
2008
2009
2010
2011
2012
2013
Source: BCRP9
Prospects for 2014
In its December 2013 Inflation Report, the Peruvian Central Bank (by its acronym in Spanish BCRP) estimates
an increase in the GDP for 2014 of 6%. Furthermore, it is also expected that at mid-2013, inflation converges
gradually to the target range of 2.0%, considering the absence of inflationary pressures associated with
increments of commodities’ prices.
According to the Multi -Annual Macroeconomic Framework (by its acronym in Spanish Marco Multieconómico
Multianual - MMM), issued by the Ministry of Economy and Finances, it is expected that the current account
will have an average deficit of 4.3% of the GDP for the 2014-2016 period. This deficit is projected to continue
and will be financed primarily with mid and long term capital flows, which will maintain a high level of
international reserves necessary to be ready to respond to international negative events.
At the end of the next year, according to the survey of macroeconomic projections prepared by the BCRP in
December 2013, it is expected that the exchange rate reaches 2.83 Nuevos Soles per US$ Dollar1⁰. 7 Data from the “Stock Exchange Report – December 2013” from the Lima Stock Exchange Web (www.bvl.com.pe).
8 Data from the “Stock Exchange Report – January 2014” from the Lima Stock Exchange Web (www.bvl.com.pe).
⁹ Data from the web page of the Peruvian Central Bank. (www.bcrp.gob.pe). Section “Statistics”.
10 According to opinions of the Financial System Institutions.
Much more than expected:
benefits of Camisea
Camisea is the largest and most ambitious
power project in Peru during the recent years.
Access to an energy source such as natural
gas and natural gas liquids of Camisea has not
only reduced the dependence on other more
expensive hydrocarbons, but it also benefits
environment, because it is a less contaminant
power source respect to the alternative fuels.
We now present some of the estimated
economic benefits associated with Camisea
for users and the country11.
Savings for Electric Users
Camisea Project began creating tangible
benefits in the power sector since May 2000.
Starting on that date, the availability of Camisea
natural gas began to be considered for the
calculation of electricity bar rates12.
With Camisea, electricity rates were significantly
lower than the ones expected without this
Project.
Based on this, the savings for electricity users for
having lower electricity prices from May 2000 to
December 2013 would have been US$ 19,000
million.
Savings for Vehicular NG Users
Up to December 2013 it has been obtained
about US$ 2,500 million of savings due to the
conversion of vehicles that formerly worked
with gasoline and diesel. The saving is due to the
relative prices difference among the natural gas
and the alternative fuels.
Benefits for Peruvian State
It is important to mention that, in addition
to the direct economic benefits, experienced
by the users, Camisea Project also resulted in
significant income for the Peruvian Government.
In this way, since the beginning of operations
to December 2013, the country has received
revenues for more than US$ 7,800 million from
royalties and income tax.
Additionally, Camisea Project contributed to the
improvement of the Balance of Hydrocarbons.
If we compare actual Balance of Hydrocarbons
between the set-up of the project’s operations
at the end of 2004 and December of 2013, with
the Balance associated to a scenario without
Camisea, the commercial deficit would have
been US$ 10,500 million more.
Savings of residential,
commercial and industrial
natural gas users
On the other hand, natural gas direct users
also experienced significant benefits when
starting using this fuel. It is worth to mention
that natural gas substitutes are oil derivative
fuels such as diesel 2, petroleum liquefied gas,
residual, among others. These substitute fuels,
in addition of being much more contaminants
than natural gas, have also a higher cost. Then,
current industrial and domiciliary users of
natural gas saved until December 2013 over
US$ 5,200 million.
11 Figures are presented in current values and have been obtained from the report “Updating of the Economic Impact of Camisea in Peruvian Economy”
prepared by Macroconsult S.A. on February, 2014.
12 Until 2004, a four year horizon was considered for power demand for setting the bar rates. Then, a change was made framing the projection of electric
demand in two years.
/19
Annual Report 2013
Market Development
Natural Gas Transportation
Independent Customers
TgP has a very important portfolio of customers,
mainly made up by electricity companies,
distribution and large industries.
To be an independent customer of TgP, the user
must have natural gas consumption not lower
than 30,000 m3/day, otherwise, the customer
must request natural gas transportation through
distributors.
/20
Power Generators
Up to December 2013, power generators that
have a valid transportation contract with TgP
are EDEGEL S.A.A., through its thermal power
stations Ventanilla and Santa Rosa; ENERSUR S.A.,
through thermal power station Chilca1;
Kallpa Generación S.A through thermal power
station Kallpa; SDF Energía S.A.C, with its
plant Oquendo; EGASA through its thermal
power station Pisco; EGESUR with its station
in Independencia; Duke Energy S. en C. por A.
with its thermal power station Las Flores, Fenix
Power S.A. with its thermal power station Chilca
and Termochilca S.A.C. through its central plant
Santo Domingo de Olleros.
In these days, the installed power up to
December 2013, of the Camisea natural gas
power stations have contributed approximately
3,100 MW to the electricity system, which
represents the 40% of the country’s generation
capacity.
Distributors
(Regulated Customers)
Up to December 2013, TgP has in force
transportation contracts with two companies
which provide distribution service of natural
gas in the department of Lima and the
constitutional province of Callao (Gas natural
de Lima y Callao S.A.- Cálidda); and trough the
department Ica (Contugas S.A.C.).
Users with consumption lower than
30,000 m3/day may enter into contracts only
with the distributors for the supply of natural
gas. The group of regulated users includes
residential customers, small and medium size
industries, and car service stations (GNV).
Industrial Customers
TgP’s industrial customers are companies
engaged in different production activities such
as metal industry, oil, cement, ceramic, glass,
textiles and food. These users consume more
than 30,000 m3/day. This is a list of the existing
independent customers of the transportation
service:
> Alicorp S.A.A.
> Cerámica Lima S.A.
> Cerámica San Lorenzo S.A.C.
> Corporación Aceros Arequipa S.A.
> Corporación Cerámica S.A.
> Minsur S.A.
> Owens-Illinois Perú S.A.
> Perú LNG S.R.L.
> Pluspetrol Perú Corporation S.A.
> Sudamericana de Fibras S.A.
> UNACEM S.A.A.
The City Gate in Lurin is the place where
natural gas is delivered to all customers that
are connected to Cálidda’s distribution system.
Humay is the delivery point of the Pluspetrol
Perú Corporation S.A. (Pluspetrol) own use
principal pipeline from Humay to Lobería.
Three companies in Pisco are connected to this
line: (i) the fractionation plant of Pluspetrol;
(ii) Minsur; and; (iii) Corporación Aceros
Arequipa. In Chilca there are five direct
connections for electricity generation
companies Duke Energy S. en C. por A.,
Enersur S.A., Fenix Power S.A., Kallpa Generación
S.A., y Termochilca S.A.C. at December, 31th.
NATURAL GAS TRANSPORTATION BY SECTOR 2013
Local Market
28.1%
generator companies of 1.2%, and the demand
for natural gas from independent customers
increased by 3.1%.
QUARTERLY NATURAL GAS TRANSPORTATION 2013
Local Market
16
14
Volume (Mm3/day)
These delivery points are currently operated
by the distribution company Calidda. Also,
the KP 527 is the delivery point for electricity
generation companies Egasa and Egesur, which
possess an own-usage pipeline that carries the
gas to its plants. Finally, at KP 211 a connection
for delivery of gas to Peru LNG Company S.R.L.
has been enabled. Furthermore, Ica’s distributor
Contugas S.A.C. got enabled two connection
points in Chincha (KP 559) and Humay(KP 520).
12
10
8
6
4
2
62.6%
0
1T-2013
2T-2013
3T-2013
4T-2013
Power Generators
Independent Customers
9.3%
Distributors
Power Generators
Independent Costumers
Distributors
Demand
During 2013, the average transported
volume of natural gas for local market was
14,202 Mm3/day. This volume represents an
increase of 3.6% with respect to 2012.
The increase in the transported volume
was mainly due to the augmentation of
consumption by customers that contract natural
gas transportation service through distributors,
which grew 8.2% as compared to the previous
year; and are responsible for the 67.4% of the
annual increase. It should be noted that, there
was also a rise in the consumption of power
Regarding the transportation service of natural
gas for Perú LNG, TgP has transported to the
delivery point in Chiquintirca (KP 211) an
average of 17,340.63 Mm3/day, additionally to
the volumes showed above.
Contracts
Regarding the natural gas transportation
service, there are two forms of contracts.
The first one is the firm volume transportation
service when the user sets a daily fixed
capacity and payment is irrespective of its use.
The second one is the interruptible volume
transportation service when the user sets a
maximum daily transportation volume but only
pays for the volume actually transported subject
to the available network capacity.
/21
Annual Report 2013
Natural
Gas Liquids
Transportation
In case of natural gas liquids transportation
service, our company has two agreements with
the producers of Camisea fields. The Producers
have Ship or Pay contracts in force with TgP for a
firm transportation capacity of 110,000 bbl/day
for 2013. It is important to mention that, during
the year, the poly-pipe transported an average
of 100,918 bbl/day.
NATURAL GAS LIQUIDS TRANSPORTATION 2013
Quarterly
Gas transport
is our task.
Transporting
it properly, our
commitment
TgP has policies and action plans, as well as
management models and targets to lead the
activities. This assignment, "performing our task
properly" is highly prioritized in the business
model we develop.
110
/22
According to previous
statement, performing
tasks correctly involves:
Volume (bbl/day)
100
90
> Social Commitment
Performing under a participative view,
developing mutual collaboration relationships
with communities nearby our operations.
80
70
60
50
1T-2013
2T-2013
3T-2013
4T-2013
> Environmental Commitment
Performing in an environmentally responsible
way in all of our tasks, to prevent or mitigate
environmental impacts related to our
operations.
> Continuous Improvement
We bet for continuous improvement in all
of our activities, relentlessly searching and
capitalizing development opportunities in
order to achieve our strategic objectives
both effectively and efficiently.
> Technical and Operative Excellence
Working under the highest technical
standards maximizing the reliability and
availability service provided.
> Ethical Commitment
We are committed with veracity, performing
tasks properly and working with honesty and
integrity.
> Focused on the Staff
Convinced that our major company potential
is our staff, we encourage their capacities
growth and promote a good organizational
climate that leads to a self-integral
development.
> Occupational Health and Safety
We are committed to occupational safe and
healthy in our operations, ensuring at all-time
the integrity of our staff, our contractors and
communities nearby our operations.
> Transparency Management
Honoring our stakeholders, staff, clients,
suppliers, neighbors and related institutions
trust, working in a transparent way making
public our management.
Bigger Responsibilities in a
new scenario
During 2012, armed groups attempted against
TgP's facilities and contractors, forcing the
company to cease expansion works and restrain
the maintenance activities. Nevertheless, this
scenario improved during 2013 thanks to
Peruvian Government security support and TgP
staff commitment to face this situation with the
highest professionalism. Thanks to this, during
2013, the transport operation was continuous,
some of the maintenance activities were
performed and expansion projects needed to
attend the growing demand were restarted.
This improvement winds strengthen the
stakeholders’ confidence in TgP, in such sense,
in April 30th, the company issued senior
international bonds for a total amount of
US$850,000,000 with a 4.25% rate and a final
redemption in 2028. A complete record for a
Peruvian company; not only for the amount,
but for the percentage rate and the term
obtained. To sum up, TgP is considered to be a
solid operation with great future projections by
investors worldwide. An additional sign for this
was the purchase contract subscribed by Graña
y Montero S.A.A. with Pluspetrol Resources
Corporation for the total shares owned indirectly
by them in Transportadora de Gas del Perú S.A.,
which represents 12.38% of the company’s
social capital, for an equivalent amount of
US$237,000,000.
On the other hand, during 2013, TgP signed
in September an addendum to the Natural
Gas Transport Concession Contract in order
to keep contributing to the country's growing
energy demand. In this addendum is agreed to
perform all necessary projects to expand the
Transportation System capacity. To ensure this, a
new loop will be built in the coast, the works in
the jungle compressor facility will be restarted
and a branch will be done from the existing
pipelines to the city of Ayacucho.
This last project has got a special implication for
being the regional pipeline in the center of Perú
and for being the "spearhead" in the Peruvian
Government project for natural gas expansion in
the country highlands.
In 2013 the programs that allow the company to
keep the highest standards in the industry were
continued. So was renewed the certification for
the Integrated Management System regarding
the ISO 9001, ISO 14001 and OHSAS 18001
standards related to Natural Gas and Natural Gas
Liquids Transport process.
The Continuous Improvement Program
developed its second edition, involving 12
teams and 72 contestants, which through
projects have generated over US$1,500,000
in company savings. Equally TgP kept on the
implementation of the Business Continuity
/23
Annual Report 2013
Management System, founded in the
forethought to keep operations when facing
scenarios beyond the company’s control. Also, in
order to strengthen the organizational climate,
the Communication and Culture program
continued during 2013.
Generally, in 2013, TgP kept demonstrating the
strong commitment to the gas transport task
that supports Perú's growth despite the great
challenges that is facing and that will probably
face in the future.
Safety
First
/24
Right after the violence incident lived in 2012,
TgP strengthened its effort for patrimonial
and personal security in its operation. That
is how it was decided to follow activities to
accomplish this objective. First, a security study
was performed to design security previous
activities that should be taken in count in the
Transportation System first 220 Km.
At the same time, since the first incident,
major coordination with different Peruvian
Government entities: Energy and Mining
Ministry, Defense Ministry and Army Force Joint
Command (COCOFA - Spanish acronyms for
Comando Conjunto de las Fuerzas Armadas)
took place to provide the necessary security
conditions in the area. In March 2013, the
Army installed the first temporal base in the
expansion project Compressor Plant located
in the Kp 127. Also, COCOFA placed other
military bases in the nearby area during 2013,
achieving greater security coverage, and
with that, greater guarantees for the Project
development. Moreover, some maintenance
activities and geotechnical works in critical areas
were restarted. People keep working hardly to
incorporate protection resources that allow the
maintenance and geotechnical works to reach
their normal level.
In May, 2013, works were restarted at the
Compressor Plant, so, in addition to the previous
agreed actions, plans and protocols, based in
the security study performed, were elaborated
for staff and supplies entry, in such way that
both would be given coordinately with Security
Forces. These protocols are communicated to all
staff about to entry through trainings.
Also, for the Compressor Plant staff, a training
program was developed and is being executed
regularly, consisting in practical non-opinion
regarding how to proceed in case of any
emergency related to physical security.
The commitment for security to staff, contractors
and communities nearby TgP influence area,
forces the Occupational Health, Safety and
Security Plan to be more demanding, in order to
match the current legal frame and corporative
standards.
The general plan guidelines have as reference
the OHSAS 18001 (Occupational Health and
Safety Management Systems) international
standards, which main goal is to prevent
accident and illness.
Constant coaching and training is the base
to continuously improve the operations and
security themselves. In occupational safe and
healthy regards these are basically divided in
two groups: Introductory Training for New Staff
and Occupational Health and Safety Coaching.
In 2013, 5,194 training activities were performed
in occupational health and safety in every
operating front, adding 93,615 man-hour to
training hours. Emergency simulation practices
were also intensified in the three operative
sectors. During 2013, a total of 42 simulations
of different type were performed (first aids,
evacuation, fire, emergency zone, NG outflow
and NGL leakage) which counted with the
participation of all company areas and the
contractors. In the spillover and leakages
simulations also involved the authorities (local,
stakeholders, and regional) and communities
close to the event influence area.
TgP Health and Safety Management comprise a
set of plans and programs oriented to prevent
occupational illness and work accidents.
Here we describe some that allows reviewing
the company performance in that matter:
the Training Plan, the Accident/Incident
Management, the Safe Work Analysis
Evaluation (SWA) and the Work through
Preventive Observation (STOP – Spanish
acronyms for Seguridad en el Trabajo mediante
la Observación Preventiva).
The Safe Work Analysis (SWA) is the most
important tool for operating risks analysis.
Through this document is possible to establish
the steps to follow, the associated risks and
preventing actions corresponding to each
task executed. The SWA field evaluation
process allows measuring this tool usage and
is a fundamental element to perform work
inspection in safety management. During 2013,
1077 SWA evaluations were made, resulting in a
97/100 usage, which indicates the high level of
fulfillment in this tool usage.
One of the most contributive tools to achieve
a successful SAS management is the Work
Through Preventive Observation Program
(STOP) that enables to observe, detect and
correct unsafe acts; as well as the identification
of safe acts that contributes to promote the
continuous safe performance.
This tool seeks to develop self-observation skills
in the staff allowing preventing, recognizing and
removing risk acts and conditions that might
unchain injuries or accidents. For this, the staff
counts with an observation card (STOP Card) on
which they register any risk acts or conditions,
likewise the ones they consider secure.
In this way a total of 4,000 STOP Cards were
achieved in 2013, demonstrating the staff
inputs being a key aspect to a strategic safety
management.
The following indicators are used for accident
analysis:
a) accident with lost time involved frequency
rate and
b) the recordable accident frequency rate.
Both calculated according to the law in force
standards, with the base of one million
Man-Hours worked:
Accident with lost time involved frequency
rate (IFN)
Nº Accidents with lost time X 1'000,000
Man-Hours worked
Recordable Accident Frequency Rate
(IFR)
Nº Recordable Accidents X 1'000,000
Man-Hours worked
So, for 2013, the indicators that measure our
occupational health performance achieved the
following results:
> Accident with Lost Time Involved Frequency
Rate (IFN) = 0.47
> Recordable Accident Frequency Rate
(IFR) = 0.95
It is worth to remark that 4'583,923 MH were
worked in 2013, with peaks of 2,034 workers
(operation and projects) and this indicators
position us in the top of the companies in
the gas industry. In addition it is important to
mention that in January 16th, 2014 the company
turned six years without any aerial accidents.
These results are due to operative factors and
organizational conditions that played three
fundamental aspects: the leadership shown
by the supervisors in every operation area, the
experience gained through the years and the
commitment acquired by every contractor
company, which are a process vital motor. All
that, in addition to the Integrated Management
System (IMS), which has marked a milestone in
safety management and has allowed reaching
the highest international standards in every
process.
/25
Annual Report 2013
Responsible
and Inclusive
TgP seeks to be a social, responsible and
trustable agent to our stakeholders, therefore
considers that social management must ease
the Pipeline Transport System (STD, Spanish
acronyms for Sistema de Transporte por Ductos)
operation through developing mutual benefit
relationships with communities that inhabit our
influence area.
/26
TgP guides all actions through the Social
Management Plan, which is meant to
standardize internal process and reshape
working alignments starting from previous
years’ experience in the Coast, Highlands and
Jungle. This has enable systematize the obtained
results and identify improving opportunities in
the currently executing programs. To elaborate
the Social Management Plan were taken
in consideration: the legal frame related to
hydrocarbon industries, as well as the Banco
Interamericano de Desarrollo (BID) international
management standards and the Financing
International Corporation (Environmental and
Social Guidelines and Project Procurement:
Environmental and Social Safeguards Risk
Management).
This plan supports itself in two strategic
guidelines: conflict forethought and conflict
solution; each of those is at the time performed
through the following programs:
> Local Labor Hiring Program (PMOL, Spanish
acronyms for Programa de Contratación de
Mano de Obra Local), seeks to impulse the
development of the communities within
the influence area and it is oriented to
efficiently manage the local non-qualified
labor demand through local labor temporary
hiring, according to operation, maintenance
and expansion requirements.
> The Social Communications Program
(PCS – Spanish acronyms for Programa de
Comunicación Social), seeks to establish
efficient and permanent communication
mechanisms with local communities,
related companies, municipal and regional
authorities.
> The Community Environmental Monitoring
Program (PMAC – Spanish acronyms
for Programa de Monitoreo ambiental
comunitario). This program aims to obtain
reliable and independent information
about the Transportation System’s potential
social and environmental impacts, with
the purpose of timely management and
appropriate corrective actions.
> Conflict and Negotiation Management
Program (PGCN – Spanish acronyms
for Programa de Gestión de Conflictos
y Negociaciones) has been the key to
establish transparent relationships with
communities within the influence area. For
TgP, is important to collect information with
concrete concerns, expectatives and claims
received from the communities, as well as
promoting a dialogue culture in intercultural
context.
In regards of the Transport System expansion
plan in the Jungle region, an Integral
Educative Project was implemented as part
of the Local Development Support Program
named “TgP Educates”, aiming to contribute
in the educative quality improvement in the
communities within the expansion influence
area.
> The Local Development Support Program
(PADL – Spanish acronyms for Programa
de Apoyo al Desarrollo Local) seeks to join
efforts with authorities, local institutions and
communities themselves to take part in the
development of the communities located
within TgP influence area.
Social Management team defined five strategic
guidelines to develop the PADL during 2013 in
the following way:
1. Social
Attending directly aspects referred to the
communities’ development within the
influence area, with a 23% of TgP total
social investment. The scope covered the
capacity strengthen in children, youngsters,
adults and weak groups (peasant and native
communities), and the support for cultural
activities and others related.
2. Environmental
Directed to environmental coexistence
improvement, 18% of total investment
was invested in sustainable use of natural
resources and the capacity strengthen for
an adequate environmental behavior. These
projects scope covered thematic related to
environmental education.
3. Educative
For 2013, TgP prioritized this guideline
considering 23% of the total social
investment, regarding the improvement for
formal public educative services, framed
inside government educational institutions.
These projects scope covered infrastructure,
supplies provision improvement and direct
attention to students and teachers capacity
strengthen.
4. Health
With the main objective to improve
health care provided by State institutions.
TgP invested 13% of social investments.
The scope covered the infrastructure
improvement, supply provision for health
care, capacity strengthen for health
professionals and promoters, and medical
campaign organization.
5. Productive
With the objective to contribute with the
goods and service self-consumption and
trading, TgP invested 23% of the total social
investment. Generally related to primary
economic activities (agriculture, cattle raise
and tourism), emphasizing the capacity
strengthen component and encouraging
innovative activities.
Social Investment Strategic Guidelines
TgP 2013
18%
23%
23%
13%
23%
Environmental
Educative
Productive
Health
Social
Main Projects executed
during 2013:
1. “Native Communities and Rural Settlement
Assessment and Training for Pisciculture
Project Implementation in the lower
Urubamba, Echarate”.
2. “Project designing and communal pond
Construction for Pisciculture and Amazonian
fish breeding in captivity in Mazokiato Native
Community”.
3. “Project designing and communal pond
Construction for Pisciculture and Amazonian
fish breeding in captivity in Manitinkiari
Native Community”.
4. “Support to cofee and cacao management in
Manatarushiato”.
5. “Solid Waste Management in Native
Communities”. Building and implementation
of segregation booths in the Timmpia,
Camana, Chocoriari, Monte Carmelo,
Puyentimari and Shimaa communities.
6. “Repopulation of Taricayas
(Podocnemisunifilis) in the Lower Urubamba,
Echarate, Cusco. In the Chocoriari, Timpía and
Camaná Native Communities”.
/27
Annual Report 2013
7. “Improvement of the peach, tara, eucalyptus
and pine production in the Pipelines scope,
San Miguel and Chilcas Districts, de la Mar
Province - Ayacucho”.
8. “Technical capacity strengthen for coffee
crop handling in Mejorada and Huayrapata
localities, Anco District – La Mar – Ayacucho”.
9. “Afforestation and reforestation in soils
suitable for forestry in the Parcahuanca,
Cuchicancha, Andaraccay, Pomapuquio and
Seccelambras communities in the Acocro
District”.
10. “Afforestation on soils suitable for forestry
in the Vinchos Peasant Community, Vinchos
District, Huamanga Province – Ayacucho”.
11. “Forage floor installation in llachoccmayo
and Fundo Illahuasi communities, Chiara
District, Huamanga Province – Ayacucho”.
/28
12. “Productive capacity strengthen and
merchandising from eggs – Trucha
fingerlings in the San Martín de
Yanapiruro-Ichubamba community,
Chiara District – Ayacucho”.
13. “Building of floating cages and installation
for trucha Breeding in the Ccaraccocha
lagoon – Pilpichca Peasant Community,
Pilpichca District, Huaytará Province,
Huancavelica Region”.
14. “Milk Cattle genetic improvement in
Toccyascca community, Socos District,
Huamanga Province – Ayacucho”.
15. “Contribution to social skill development
in preschool and primary education, Hermilio
Valdizán School, Pampamarca, Ayacucho.
Living Pampamarca Values”.
16. “Support to commercial and productive
management for guinea pigs in seven
populated centers in Humay and Huáncano,
Pisco, Ica”.
17. “Improvement in grasses grown for cattle
and minor animals feeding in Humay, Pisco,
Ica”.
18. “Support to commercial and productive
management for sweet cucumber in Santa
Ángela, Cañete”.
19. “Values Education Strengthen through
sports in public schools in Lower Herbay,
Lower and Higher Sands – Cañete, Lima”.
20. “Support to commercial and productive
management for grape in La Esmeralda,
Encañada, Cañete, Lima”.
Respectful
with the
Environment
One of the company priority purposes is to
perform the operations safely, reliably and
efficiently through a policy to forethought,
control and mitigate potential environmental
impacts. This policy allows us to accomplish
both legal requirements and the willingly
subscribed agreements signed by the company.
To accomplish this, the company frames the
management inside the ISO 14001 guidelines.
> Environmental Monitoring
Convinced to treat the environmental
protection as a priority, the company performs
periodical physical-chemical monitoring
in several spots along the RoW, analyzing
parameters such as noise, atmospheric
releases, air and liquids quality. The purpose
is to identify possible changes in the
environmental quality.
During 2013, it was performed the quarterly
physical-chemical monitoring in air quality
matrices, water quality, environmental noise,
effluents and emissions, reviewing the 132
monitoring spots forming our network. The
quarterly environmental monitoring reports
with the Monitoring Plan results were issued
to the regulatory organisms.
> Biological Monitoring
A Biologist team evaluates the entire transport
area, prioritizing 34 biologically sensitive areas,
such the amazonic flat woods, the mountain
woods (including protected areas such as
the Machiguenga communal reserve end the
damping zone), wetlands, queñuales woods in
the highlands, dry woods in the inter-Andean
valleys and the coastal desert located between
Ica and Lima.
Monitoring comprises, also, the different
mammals, birds, amphibians, reptiles and flora
groups, as well as the water life in rivers and
ravines.
During October and November 2013,
biological monitoring was performed in the 29
monitoring stations located in the Coast and
Highlands. The Jungle stations had restrained
access due to security measures instituted by
the company because of the Emergency State
in such stations. Therefore were evaluated,
in 11 stations, the birds and herpetofauna
groups, in 3 stations mammals group, in 7
stations the flora and vegetation group, water
life group in 13 stations and water quality in
23 stations.
> Reforestation
The company performed Works in erosion
control, re-vegetation and reforestation in the
jungle area, achieving to decrease the RoW
average to 25 meters. As it can be reviewed,
the area used in the jungle area was 503 ha,
shaped by many different soil types: mountain
woods, mountain woods pacal, semi-dense
primary amazonic woods, amazonic woods
pacal and dense primary amazonic woods.
The pipeline transport system goes through
38.4 ha of the Machiguenga communal
reserve and through 238.7 ha in the damping
area in the Machiguenga communal reserve,
the Megantoni sanctuary and the Otishi
national park. In the Highlands, the area used
to install the pipeline transport system was
758.2 ha, from which the RoW went across
13.2 ha composed by Andean wetlands. The
reconstruction works performed in that area
has allowed the recovery of over 80% of the
wetlands.
In the Coast, the area used by the Project was
802.7 ha, from which 18.9 ha belonged to the
damping area of the Paracas reserve.
In 2013, the re-vegetation maintenance in
the highlands area was performed, involving
the tillers or cuttings transplant activities,
improving the top soil, fertilization, invasive
species removal from the wetland, among
others, resulting 115.8 ha maintained and
re-vegetated. The monitoring to the wetlands
inside the TgP operations sensible areas
was also performed, through the Biological
Monitoring Plan, verifying the maintenance
done.
The re-vegetation process plays a key role in
TgP’s transport operation system, given that
it protects the soil from erosion allowing it
to integrate the natural landscape. This way,
the ecological equilibrium in each area and
closing it to the final vegetal architecture
designed for the RoW.
> Waste
TgP counts with a Solid Waste Management
Plan for the Pipeline Transport System
(STD). There are designated the guidelines
to follow in order to manage according to
environmental current legal standards and
the company environmental policy.
This way, 100% of the waste generated by the
STD operations are treated and disposed in
authorized places. Also, taking advantage of
the 100% of the organic waste, accomplishing
its treatment and reuse in shape of compost.
For that regard, the company innovated
in new methods development for waste
treatment, adjusting the process to each
different weather and altitude conditions
proper from each region where operations
run.
During 2013, 544 MT of Solid Waste was
generated, treated and disposed in authorized
places. 88.7 MT organic waste was generated
(16.3% of generated waste) were transformed
into compost, producing 6.9 MT of this
product which were employed in
re-vegetation activities and in the Family
Orchard Implementation Program in
Chiquintirca. From 544 MT generated in 2013,
17.5% (95.68 MT) were recycled, among
them can be highlighted the organic, plastic,
cartons, recycled oils, batteries and metals
waste.
/29
Annual Report 2013
> Contingency Plan
Since the beginning, the company counts
with a Contingency Plan where the processes
are detailed in order to react adequately
when facing any emergency situation.
This document details the resources and
responsibilities assigned, and are defined the
effective communications flows, among other
regards. Given this methodology the company
is capable to face any emergency in the
different transport system areas. To do so, has
ten emergency kits located in eight strategic
places, which are monthly reviewed to ensure
it operability.
this to verify the accomplishment and
correcting the possible deviation from the
company standards.
Finally it is worth to highlight that during
2013, 3420 environmental matters trainings
were performed, involving a total 22,910 MH
invested.
In 2013, also had 12 environmental
supervisions leaded by the Environmental
Supervision and Prosecution Organism
(OEFA – Spanish acronyms for Organismo de
Supervisión y Fiscalización Ambiental).
Also, a total of nine emergency responsive
squads have been organized, which are
trained to face any NGL spill over water flows
or soils.
/30
NGL spill and NG outflow simulations were
performed in the highlands and coast
in November 7th and 21st respectively,
obtaining an Emergency Respond Indicator
(IRE – Spanish acronyms for Indice de
Respuesta a Emergencias) of 96.77% and
98.82% respectively, both in presence of a
INDECI agent and in the highlands also with
representative agents from San Antonio
de Antarparco community in Ayacucho,
Osinergmin, DIRESA Ayacucho, Ayacucho
PNP and Huancavelica PNP, and Ayacucho’s
Environmental Aspects Prosecutors. No
simulations take place in the Jungle due to
security issues.
In advance to the Coast and Highlands
simulations, during 2013 inspection visits were
performed together with the operative areas
to the control spots, control spots installation
practices with the emergency squads in
each region, and signage installation in the
control spots to easily identify when facing an
eventual contingency.
> Supervision and Auditory
Following the IMS guidelines, the company
counts with its own certified staff as internal
auditors, which are constantly coached to
maintain and strengthen the different areas
commitment to the continuous improvement
of the management system. In 2013, 518
environmental inspections were performed,
Our operations
are safe,
reliable
and efficient.
The
Expansions
Our operative indicators point TgP as a
worldwide class transporter. Nevertheless,
we are conscious about facing two big
challenges: the growing gas demand and the
new unsecure conditions in the Jungle and
Highland regions. In order to overcome these
barriers it is necessary to improve the available
security infrastructure working side by side
with Peruvian Government and together
coordinating optimal working conditions for our
contractors.
TgP recognizes the importance of the
contribution of the gas to the energetic country
matrix, therefore we have developed initiatives
to ensure the supplying process in the most
efficient way.
During 2013, the Peruvian Government through
their Order Forces, performed important
efforts attempting to restore the security
conditions in the area, that, as informed in
our Annual Report 2012, had forced to cease
activities in the expansion projects originally
forethought. However, these actions that
would enable to continue the construction of
the expansion project “Compression Plant”,
since it was a project located in an enclosed
perimeter, would not do so in an extended
project with a great length such as the South
Loop (project consisting in building a 55
kilometers pipeline parallel to the original one
in the jungle area). Within this panorama, the
Government solicited to TgP to assess expansion
alternatives that would allow reaching the
required transportation capacities in the
required terms. For this, it was redesigned the
original Expansion Project, based on raising
the “Compression Plant” KP127 installed
capacity from the originally forethought and
constructing a Loop in the Coast between
Chilca and Lurin, projects that also enabled the
forethought expansion to 1.540 MMPCD.
In such way, in September 2013, TgP and
the Energy and Mining Ministry signed a
new addendum to the Natural Gas Transport
Concession Contract that contractually
settles the new design of the Natural Gas
transportation capacity expansion that, if not
because of Major Force events, should be
completed by the end of the year 2015.
Ever since, the works in the “Planta Compresora”
have restarted and the works regarding the
Coastal Loop II begun, completing during
2013, 90% of the archeological recues that
enables the new Loop right of way for the future
programmed construction.
With the new addendum execution, TgP also
committed to build the derivation pipeline to
Ayacucho, first pipeline of a future branch that
could reach Huanta and Huancayo. During 2013,
it begun the execution of works regarding the
basic engineering as well as the many different
environmental and social studies that will
enable the project execution during 2014.
/31
Annual Report 2013
Management
Analysis
Transportadora de Gas del Perú is involved
in many Administrative Procedures and
Prosecutions that, for the present document,
imported a sum upper to 115 Tax Units.
Nonetheless, we must mention that those
prosecutions are tied together to regular
business development, reasonably considering
that some of them might end in a significant
adverse result to financial position or company
results.
In 2013, the company obtained a profit of
US$ 63.4 million compared to last year that
showed a decrease of 31%, due to a non-cash
reduction in net income, as a consequence of
the extinction of the obligation to construct
the South Loop Project (for more details, go to
Expansions chapter), that generated an income
tax of $102.5 million. This was compensated by
the higher transportation revenues, which are
detailed later.
In the sense and context above described,
is informed that during 2013 neither
Osinergmin nor the OEFA (Spanish acronyms
for Environmental Evaluation and Control
Organism) organism that replaced Osinergmin
in environmental control matters (from the
Environment Ministry) have impost any penalty
to the company, not even Administrative
Procedures have started against the company.
As a result of the reviewing of the affidavits
of the income tax corresponding to years
2004, 2005, 2009 and 2010, the Company
received from the Tax Authority the fine and
determination resolutions in which were
determinated compensations to the income
tax for US$ 16.82 million, plus interests and
accessories. The Company has presented its
claim to these resolutions.
NET INCOME
100.0
80.0
Millions US$
/32
In the legal
framework
60.0
40.0
20.0
20.0
0.0
2011
2012
2013
During this year, sales totalized US$ 509.4
million, amount that is consistent with the
estimates for this period, and accounted a
10% rise compared to the income in the
previous year. Incomes were distributed as
follows:
> US$ 125 million granted by Interamerican
Development Bank (IDB) and Corporación
Andina de Fomento (CAF) in 2004 for a term
of 14 years,
> US$ 50 million granted by Banco de Crédito
del Peru (BCP) in 2007 for a term of 10 years,
SALES BY SOURCE
600.0
> US$ 80 million granted by BCP and the French
bank Natixis for a term of 7 years,
500.0
> US$ 150 million granted by BCP, Natixis
and CAF in 2008 for a term of 7 and 10 years,
> US$ 151 million granted by Banco Nacional de
Desenvolvimento Económico e Social de Brasil
(BNDES) in 2010 for a term of 8 years,
400.0
Millions US$
The loans obtained by TgP along its history are:
300.0
> In December 2011, a new loan for
US$ 205 million was granted by BBVA Banco
Continental for a term of 12 years.
200.0
100.0
0
2011
2012
2013
Natural Gas
Liquids
There has been a sustained growth in the
Company’s operating income from natural gas
transportation, reaching US$ 335.4 million in
2013. This increase in income from natural gas
transportation was mainly driven by 80 MMPCD
additional firm capacity contracted by Fenix
Power Perú S.A. and Termochilca S.A.C. which
started in January 1st, 2013.
The cost of services in 2013 amounted to
US$ 211.1 million, which represents an
increase of 7.3% compared to 2012. This is
mainly explained by the increase in the level of
activities and operations in the company.
In 2013, financial expenses amounted to
US$ 107.5 million, which implies an increase of
21.6% compared to the previous year, mainly
due to expenses associated with the refinancing
operation of the company in the second quarter
of 2013.
On the other hand, in August 2004 TgP issued
the First and Fourth Issuance of the Corporate
Bonds First Program for US$ 200 million and
S/. 236.6 million, respectively; and in May 2005
the Fifth and Sixth Issuance of the Corporate
Bonds First Program for US$ 71.1 million and
S/. 28.96 million. The issuances in US$ had a
term of 15 years and the ones in S/. have a
term of 25 years. In April 2010, the company
registered two corporate bond issuances under
the Second Program, being the Third issuance
of US$ 100 million and the Fourth issuance of
US$ 50 million, both had a term of 15 years.
On April 30th, 2013, TgP issued an international
issuance of senior bonds under 144 A rule and
regulation S of the United States Securities
Act. of 1933 for US$ 850 million at rate 4.25% for
a term of 15 years. The use of proceeds was to
repay bank loans, repayment of issuances from
the First Program Corporate Bonds (First and
Fifth issue) and the Second Program Corporate
Bonds (Third and Fourth issue), along with other
corporative objectives.
/33
Annual Report 2013
The total amount of financial expenses during the period was US$ 37.5 million, corresponding to
interest from TgP’s bonds outstanding during 2013. On the one hand, US$ 13.3 million corresponded to
local bonds, considering that four out of six of those issuances were repaid in May 2013. On the other
hand, US$ 24.2 million correspond to the international issuance. At the end of 2013, the characteristics
of these bonds are described below:
VAC Bonds
(1st Program-4th
issuance)
VAC Bonds
(1st Programa-6th
issuance)
Currency
s./
s/.
US$
Total Debt
236,600,000
28,960,000
850,000,000
As of December
31st, 2013
/34
Senior Bonds
144A/RegS
Outstanding Amount
236,600,000
28,960,000
850,000,000
Repayment
Quarterly
Quarterly
Semi-annually
Outstanding
Straight Line
Straight Line
Payable in 5 installments each on
the last 5 years
Disbursement Date
24/08/2004
24/05/2005
30/04/2013
First Repayment Date
25/11/2019
24/08/2020
30/04/2024
End Date
24/08/2029
24/05/2030
02/05/2028
Rate
VAC
VAC
Fixed
Spread
7.125%
6.25%
4.25%
Term
25 Years
25 Years
15 Years
Grace
15 Years
15 Years
10 Years
Regarding the variation of TgP’s corporate bonds quotation in Lima’s Stock Exchange Market, the debt
representative values issued by the company have not registered any negotiation during 201313.
Likewise, it is worth mentioning that TgP has maintained for this year, the highest credit risk rating for
corporate bonds in local market, according to the evaluation made by the following three risk rating
firms: Apoyo & Asociados Internacionales S.A.C., Equilibrium Clasificadora de Riesgos S.A.,
and Clasificadora de Riesgo Pacific Credit Rating S.A.C.
On April 2013, according to the evaluation made by the main risk rating firms, Moody’s Investors
Service, Standard & Poors and Fitch, TgP got Baa2, BBB and BBB respectively.
Regarding TgP’s investment, in order to increase the current transportation capacity to 920 MMCFD,
TgP is developing the following expansion projects: The first one implies the building of a compressor
plant at Kp 127 of the actual transportation system, which would be equipped with 4 turbo
compressors (TTCC) of 18.000 HP respectively. The second one is denominated Loop costa, located
between Chilca and Lurin, which consist on the building of a 31 Km pipeline, from Kp 699 to the City
Gate in Lurín. Furthermore, TgP is in process to build a 20 km derivation from Kp 227 current pipeline to
Ayacucho.
13 As reported by the LSE in CE-002/2014 circular sent on 29 January 2014.
In general, TgP shows solid liquidity levels.
Its liquidity ratio measured by the current
asset-current liability ratio was 5.72, a 229%
increment due to the accumulation of cash
generated in the period and the liability
management that increased the long term debt;
while the acid test ratio measured as cash and
banks over current liabilities was 4.56 that result
on an increment of 235%.
These high liquidity levels are mainly caused
since 94% of TgP’s liabilities are long termed and
because an appropriate level of cash and banks
is kept, which reached US$ 328.7 million in 2013.
According to current regulation, the Company
maintains its accounting records in U.S. dollars,
which constitute its functional and reporting
currency.
From more than two years, CPCC Luis Medina
Chirinos has been in charge of the elaboration
of TgP’s financial information, and TgP’s
external auditors have been Dongo-Soria
Gaveglio and Asociados S.R.L., a member firm of
PricewaterhouseCoopers International Limited
(PwCIL). Furthermore, the opinion of TgP’s
external auditors about the financial statements
has been “without disclaimers” for the end of
2013 fiscal year.
LIQUIDITY
6.0
5.0
4.0
3.0
/35
2.0
1.0
0.0
2011
Current Liquidity
Severe Liquidity
2012
2013
According to the BOOT contracts
signed with TgP with the Peruvian
government, the technical operations of
the transportation systems are carried
out by its pre-qualified strategic operator,
which is operating through Compañía
Operadora de Gas del Amazonas (COGA).
Many of the activities described in this
Annual Report were performed directly
by COGA as operator, as shown in some
photographs.
CREDITS
Creation and Design: B+A Comunicación Corporativa
Printing: Impresso Gráfica