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North Baja Pipeline Receives CRE Approval, Awaits FERC OK

North Baja Pipeline Receives CRE Approval, Awaits FERC OK

The North Baja Pipeline Project moved to within one step of becoming reality late last week as Mexico's Comision Reguladora de Energia (CRE) issued a natural gas transportation permit to Sempra Energy International for the construction of the 135-mile Mexican segment of the $230 million, 215-mile Arizona-to-Mexico pipeline.

"Today's action by the CRE demonstrates the government of Mexico's strong support for this vital energy project," said Darcel L. Hulse, president of Sempra Energy International. "We have now passed the major regulatory hurdle in Mexico, clearing the way to begin construction on the pipeline as soon as the U.S. Federal Energy Regulatory Commission (FERC) issues its permit for the U.S. segment. We look forward to bringing this much-needed, reliable source of natural gas supplies to the northern Mexico/Southern California region."

The project, which is being developed by Sempra Energy International, PG&E Corp. and Proxima Gas SA de CV, originally was announced in June (see NGI, June 19). It will travel from an interconnection with El Paso Natural Gas, near Ehrenberg, AZ, across southeastern California and northern Baja in Mexico, and terminate at an existing pipeline system in Mexico - Transportadora de Gas Natural. The 500,000 Dth/d, mostly 30-inch pipeline, is primarily being developed to serve the growing gas demand of large industrials and power generators in northern Mexico.

PG&E National Energy Group (PG&E NEG), which is in charge of the permitting and development of the 80-mile U.S. portion of the pipeline, submitted its application to FERC in late October (see NGI, Nov. 6).

"The northern Mexico and Southern California markets are at a critical point in the need for additional pipeline capacity, largely because of the increased use of natural gas to fuel electric generation," said Thomas B. King, president of the NEG's western region. "Construction of the North Baja Pipeline will help ensure that natural gas is available for those critically needed generation facilities, as well as for consumers who use gas directly in their homes or businesses. We hope our application for a FERC certificate to build the pipeline will be processed expeditiously, so that work can begin on this important new energy project."

The companies have already entered into precedent agreements for over half of the proposed pipeline's capacity, and are involved in ongoing discussions with other potential customers. Construction on the project is expected to begin in early 2002, with an in-service date in the third quarter of that year.

Alex Steis

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