Petroleos Mexicanos' (Pemex) MexGas Supply has taken all of the capacity in Tennessee Gas Pipeline Co.'s (TGP) South System Flexibility Project.
Tennessee, a Kinder Morgan Energy Partners LP (KMP) unit, said the South System Flexibility Project will have capacity of 500,000 Dth/d. It is expected to cost $187 million and be in service as early as Jan. 1.
The project is to “provide more than 900 miles of north-to-south transportation capacity on the TGP system from Tennessee to Texas and expand Kinder Morgan's transportation service to Mexico," said KMP's Kimberly Watson, president of east region natural gas pipelines.
"Mexico is increasing development of its energy infrastructure to meet the country's rapidly growing demand, and this project builds upon our long-standing relationship with MexGas to provide additional natural gas transportation to complement Mexico’s development plans."
MexGas, the natural gas supply arm of Pemex, was formerly known as MGI Supply (see Daily GPI, Sept. 11).
TGP is also holding a binding open season for its proposed Lone Star expansion, which includes an incremental 300,000 Dth/d of firm capacity from Tennessee to South Texas for future infrastructure projects. The pipeline said it has secured an undisclosed foundation shipper for this project and would announce the results and further details when the open season concludes, which is scheduled for Oct. 31. The volumes committed are sufficient to justify building the project, KMP said.
Kinder spokesman Richard Wheatley said more details on South System and the Lone Star expansion would be made available later.