Monterrey Pipeline Now in Open Season
KN Energy began an open season for its a 108-mile, 24-inch
Monterrey Pipeline that would connect its MidCon Texas intrastate
pipeline in Starr County, TX, to Monterrey, Mexico. The open season
began yesterday and runs through 5 p.m. CDT July 30.
KN expects to start construction of the $50 million pipeline in
1999, with completion projected for the second quarter of 2000.
Capacity is expected to be 275 MMcf/d, and the pipe will serve
gas-fired power plants in Monterrey, local distribution companies,
large industrial consumers as well as future market opportunities.
"Mexico's expanding natural gas market, with consumption growing
by as much as 9% annually, requires expanded infrastructure and gas
commodity imports," said Bill Garner, KN International executive
"The Mexican government's efforts to open this market - such as
the recent lifting of a 4% import tariff on natural gas - are
positive factors toward increasing our activity in Mexico," Garner
said. "These efforts increase competitive opportunities for
companies like KN, which has built a strong presence in Mexico, to
meet the growing needs of residents, industry and power-generating
Mexico's energy regulatory commission has approved a maximum
rate for transportation service on the pipeline, about 16
cents/MMBtu, said Delia Gallardo-Barnett, KN business development
analyst. The company is not disclosing other rate information. Only
recently have rates for transportation on Pemex pipelines been
published as part of the pipes' general terms of service, she said.
Mexico's third-largest city, Monterrey is the industrial center
of the country and one of the largest gas markets in Latin America.
The pipeline will serve a couple different distribution companies
as well as a number of industrial plants. However, the big draw for
gas is power generation as several new power plants are planned in
the next four years.
KN's other projects in Mexico include Gas Natural del Noroeste,
the first local distribution company hooking up residents and
commercial customers in Hermosillo, a city of 500,000. KN also is a
partner in Igasamex, a gas pipeline connection/marketing company in
Mexico City bringing service to industries in central and southern
For information on the open season, call Enrique Velasco, KN
International director of marketing, in Mexico City at
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