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.
"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
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