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Sierrita Gas Pipeline OK’d for Additional U.S.-to-Mexico Capacity

FERC on Monday issued a certificate to Sierrita Gas Pipeline LLC’s Compressor Expansion Project, designed to add 322,794 Dth/d of firm service through its existing border crossing facility by building a compressor station in southern Arizona.

The Federal Energy Regulatory Commission also amended Sierrita’s existing Presidential Permit to reflect the expansion, which proposes a 15,900 hp gas-fired turbine compressor unit, along with associated facilities and modifications, in Pima County, AZ.

Sierrita’s existing system includes a 60.9 mile, 36-inch diameter pipeline that connects El Paso Natural Gas Co. LLC’s South Mainline to the U.S.-Mexico border near Sasabe, AZ. Sierrita’s border crossing facility interconnects with Infraestructura Energética Nova (IEnova) subsidiary Gasoducto de Aquaprieta’s existing Sasabe-Guayamas Pipeline in Sonora, Mexico, which serves state-owned Comision Federal de Electricidad (CFE).

Sierrita now provides up to 200,846 Dth/d for CFE International LLC (CFEI) to serve gas markets in northwest Mexico. During a 2015 open season, CFEI entered a 20-year agreement for 431,100 Dth/d from Sierrita, upping its firm transportation commitment by 230,254 Dth/d, with CFEI holding 71% of the contracted capacity from the proposed expansion, FERC documents show.

Sierrita is backed by subsidiaries of Kinder Morgan Inc., Petroleos Mexicanos (Pemex) and Mitsui & Co. Ltd.

The FERC order comes less than two weeks after the U.S. Department of Energy’s Office of Fossil Energy approved an application by Mexico Pacific Ltd. LLC to export up to 1.7 Bcf/d, including from Sierrita, to a planned 12 million metric ton/year liquefied natural gas (LNG) facility in Sonora, where gas then could be shipped to overseas markets.

In the recent Short-Term Energy Outlook, the Energy Information Administration (EIA) said it expects net gas exports to continue increasing through the end of 2018, driven by continued growth in LNG export capacity and continued gas infrastructure buildout in Mexico to facilitate additional exports.

While net U.S. exports more than doubled on average through the first half of 2018 compared with 2017, the EIA said pipeline exports to Mexico were relatively flat during the period, growing roughly 4%.

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