CNPC Said to Join Bidding for Odebrecht Stake in Peru Pipeline

China National Petroleum Corp. is competing with Canada’s Brookfield Asset Management Inc. to buy Odebrecht SA’s majority stake in a $7.3 billion Peruvian pipeline project, a person with knowledge of the matter said.

CNPC, China’s biggest petroleum producer, and Canada’s largest alternative asset manager are the two most recent bidders to emerge for Odebrecht’s 55 percent stake in the natural gas pipeline, said the person, who didn’t want to be identified as negotiations are private. The deal may be concluded next month.

Brookfield is better positioned to buy the stake, according to the person. Other companies interested in the stake have left the competition. Peru’s finance minister said last week in a television interview with Canal N that Brookfield has already reached an agreement to buy the stake.

Odebrecht and a representative for Brookfield declined to comment. CNPC didn’t respond to e-mails and phone calls seeking comment.

Pulling Out

San Diego-based Sempra Energy pulled out of talks to acquire the stake last month. That came after the Peru government refused to remove a clause that may put the pipeline’s construction contract at risk if the project’s previous developer is found to have committed a wrongdoing.

Development was halted earlier this year on the Peru project and Odebrecht started talks to sell its stake after the company was ensnared in a corruption probe in its home country of Brazil. A $4.1 billion loan for the project was delayed. 

Peruvian President Pedro Pablo Kuczynski promised to cancel contracts with Odebrecht if corruption is proven, according to a report on Tuesday in the local newspaper Gestion.

Jan. 23 is the deadline for banks to approve financing, or Peru’s government can rescind the project’s license, according to the person.

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