Baja Pipeline Draws Strong Market Interest; Filing Pending
Strong interest amounting to essentially double the proposed
capacity from a recently completed open season has units of
PG&E Corp. and Sempra Energy pushing for a FERC filing by the
end of this month for their joint venture natural gas pipeline
lateral from the Arizona-California border through northern Baja in
Mexico, PG&E's CEO told financial analysts Tuesday.
PG&E and Sempra jointly have proposed building a $230
million, 212-mile 30-inch-diameter transmission pipeline as a
lateral off existing east-to-west southwest interstate pipelines,
including a 77-mile leg of the proposed line that would cut through
the southeast corner of California before going into Mexico. The
proposed pipeline initially has been slated to carry up to 400
The two U. S. pipeline proponents are considering increasing the
line's proposed capacity in the upcoming FERC filing based on the
level of interest expressed, but the added volumes would be quite
a bit less than doubling the capacity, said a PG&E spokesperson
"We are moving forward nicely with a successful open season for
which we got expressions of interest more than double the capacity
of the pipeline, and we're in the process of converting these into
firm commitments and expect to file at FERC by the end of this
month," said Robert Glynn, PG&E's CEO, in announcing improved
third-quarter earnings results, but acknowledging that the company
"certainly has challenges ahead of it in the California market."
In announcing the joint venture in June, the partners said the
pipeline is targeted on new and existing gas-fired electric
generating plants and other energy-intensive industries in northern
Baja and in the southern end of California. As expected, a lot of
the initial interest comes from these sectors, along with a
developing local distribution company in the border town of
Mexicali, Mexico, the PG&E spokesperson said.
To date, there is no active competitors to this proposal.
Several years ago, El Paso Natural Gas had a proposed pipeline into
the area, but it has been dormant. The Sempra-PG&E proposed
pipeline would interconnect with one of El Paso's pipelines serving
"As far as we know, we're the only really active project for
bringing new gas supplies into northern Mexico and the southern end
of California," the PG&E spokesperson said.
The deal includes participation by the Mexican firm, Proxima Gas
SA de CV, and it is a 50-50 partnership by the two U.S companies
for their portion of the pipeline. PG&E's National Energy Group
will develop the 77-mile U.S. segment of the proposed pipeline,
while Sempra Energy International and Proxima Gas will build the
135-mile portion in Mexico in a geographical region in which Sempra
is already active in developing gas distribution and transmission
systems for several growing Mexican cities along the border.
Richard Nemec, Los Angeles
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