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Mirage Energy Corp. has secured a memorandum of understanding (MOU) to fund all of its planned 250-mile Concho-Progreso cross-border natural gas pipeline system and storage project.

The 1.2 Bcf/d Concho-Progreso pipeline is designed to connect the Agua Dulce hub and Banquete header in South Texas with Mexico's Sistrangas national pipeline grid at the Estación 19 (Station 19) and Los Ramones interconnection points in northeastern Mexico.

The project also entails development of an underground natural gas storage project at the depleted Brasil gas reservoir, with initial working gas storage of 25 Bcf, growing eventually to 52 Bcf.The Brasil field is located within 14 miles of the pipeline's planned route.

Under the preliminary contract announced last week, San Antonio, TX-based Mirage would sell 100% of its participation interest in the project to France's Organisation Mondiale de Developpement (OMD) in exchange for OMD's promise to fund the project's estimated $1.2 billion cost.

If the MOU is converted into a contract, OMD would offer Mirage a 5% carried equity participation interest, which would be characterized as a put option interest in the project.

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