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Tidelands Files Applications for Two 500 MMcf/d Pipelines with Texas Railroad Commission

Tidelands Oil & Gas Corp. took another regulatory step in establishing its ambitious gas pipeline, storage and liquefied natural gas (LNG) project in northeastern Mexico. After filing an application for part of its proposed pipeline system with Mexican authorities last month, the company submitted applications for additional pipeline permits on Thursday with the Texas Railroad Commission.

Tideland's subsidiary Sonora Pipeline LLC filed for permits for the operation and construction of the Progresso International Pipeline and the Mission International Pipeline. Both the Progresso International Pipeline and Mission International Pipeline will be 30 inches in diameter and will be connected to the pipeline infrastructure and storage and LNG projects proposed in Mexico by Tidelands' subsidiary Terranova Energia.

The Tidelands subsidiary filed an application in March with the Comision Reguladora de Energia (CRE) in Mexico for a permit to build the 1 Bcf/d Terranova Oriente pipeline system, a 160-mile bidirectional pipeline that will form the backbone of the Tidelands project south of the border. The company also intends to file soon for permits to construct three other parts to the project: the Terranova Occidente pipeline, which will extend from a connection with the Terranova Oriente system to the city of Monterrey; the 50 Bcf Brazil gas storage field in Rio Bravo, Tamaulipas; and the $150 million Dorado HiLoad regasification terminal 35 miles offshore (see Daily GPI, March 22 and March 30).

The proposed Progresso International Pipeline system will run from the Rio Grande to Donna Station with potential interconnects with Texas Eastern Gas Transmission, Tennessee Gas Pipeline and Texas Gas Transmission. It will extend 17 miles into Mexico and 10 miles into the U.S. The Mission International Pipeline will run from the Rio Grande to the Valero Gilmore Plant with potential interconnects with Houston Pipe Line, Calpine, Kinder Morgan Texas, El Paso and Gulf Terra. The line will extend 52 miles into Mexico and 25 miles into the U.S. Both pipelines each will have a maximum capacity to flow 500 MMcf/d and are designed to be bidirectional allowing for the delivery of natural gas from the U.S. into Mexico or vice versa.

Tidelands CEO Michael Ward expects multiple additional announcements in the coming weeks regarding the steps required to get the pipeline, LNG and storage portions of the company's project in place. He said recently the company expects to have all of its needed pipeline permits within the next few months so that it can begin construction and have its project in service by January 2008. Experts say the ambitious project would be a significant step in the development of Mexico's northeastern gas market.

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