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Sierrita Pipe Gets Favorable Draft Environmental Nod From FERC

FERC Friday issued a favorable draft environmental review of Kinder Morgan's international Sierrita Pipeline project, which would deliver natural gas to southwestern markets in the United States and high-growth power generation markets in northern Mexico.

"Construction and operation of the project would result in limited adverse environmental impacts. This determination is based on a review of the information provided by Sierrita and further developed from data requests," the staff of the Federal Energy Regulatory Commission (FERC) said in the draft environmental impact statement [CP13-73, 13-74]. "Approval of the project would have some adverse environmental impacts, but these impacts would be reduced to less-than-significant levels."

The Sierrita Pipeline project (formerly known as the Sasabe Pipeline project) calls for the construction of a 59-mile, 36-inch diameter lateral from El Paso Natural Gas's system in Arizona to a point south of Tucson near the international border at Sasabe, AZ. El Paso is owned by Kinder Morgan. The project, which has an estimated capital cost of about $204 million, will have the capacity to deliver 200 MMcf/d of gas (see Daily GPI,April 16).

The Sierrita Pipeline would interconnect with Sempra Energy's proposed Sasabe-Guaymas Pipeline at the U.S.-Mexico border to supply gas to power generators in northern Mexico.

Sierrita has called on FERC to act on its application by Feb. 7. It said full construction will need to begin no later than March in order to allow startup by Sept. 30, 2014, which is the same in-service date as the Sasabe-Guaymas Pipeline in Mexico. Sierrita planned  to execute a 25-year transportation service agreement with MGI Supply Ltd. for the full design capacity of the project. MGI Supply is a unit of Pemex Gas y Petroquiimica Basica (Pemex), Mexico's state-owned gas company.

A U.S. unit of Japan's Mitsui & Co. Ltd. is taking a 30% stake in Kinder Morgan's Sierrita Gas Pipeline (see Daily GPI, July 24). MIT Pipeline Investment Americas Inc. will participate in the pipeline with Kinder Morgan and Mexico's state-owned oil company, Petroleos Mexicanos (Pemex).

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