Mexican company Fermaca announced Tuesday that its 453-kilometer (281-mile), 1.3 Bcf/d La Laguna-Aguascalientes pipeline has entered into commercial operation.
The 14 billion-peso ($731 million) pipeline stretching through the states of Durango, Zacatecas and Aguascalientes is part of the so-called Wahalajara system, which when complete will allow gas from West Texas to reach Guadalajara, Mexico’s second largest city.
“As a Mexican company, we feel very honored and satisfied to contribute to the wellbeing of Mexicans and to serve as a facilitator of growth and economic development through this great project,” CEO Manuel Calvillo said. “With this pipeline, we underline our commitment to Mexico and to the development of projects that guarantee the supply of sustainable energy for the long term, assuring the country a more prosperous future.”
North of La Laguna, the pipeline connects to the El Encino-La Laguna pipeline, which carries in natural gas from Waha, TX, via the Ojinaga-El Encino and the Trans-Pecos ducts.
Manuel Bartlett, the CEO of Mexican utility Comision Federal de Electricidad (CFE), the anchor customer of the project, earlier this year said that he thought that the Wahalajra pipelines “were the most important” in the system of pipelines in Mexico, as they would provide service to the centers of greatest consumption of natural gas in Mexico’s industrial heart.
The final part of the system, the 0.9 Bcf/d Villa de Reyes-Aguascalientes-Guadalajara pipeline, is still under construction but should be online in the first quarter of 2020, a Fermaca spokesperson told NGI’s Mexico GPI.
The Fermaca pipes were two of seven pipeline projects that went through contract renegotiations earlier this year with the Mexican government. Bartlett said that under the new contract terms, Fermaca would see lower transport rates in exchange for 10 more years to the contract’s duration. The original firm capacity contracts were for 25 years.
Although there is ample cross-border capacity into Mexico, the completion of these pipelines is considered crucial for U.S. natural gas, particularly for producers in West Texas, where infrastructure bottlenecks and a supply glut have led to extremely low and even negative prices this year. The new pipelines should also lead to considerable savings for Mexico by displacing liquified natural gas imports.UNDERSTAND MEXICO PIPELINES: Pre-order NGI’s Mexico Pipelines, Market Points & LNG map today.
The Fermaca pipeline also adds to recent advances in natural gas infrastructure development in Mexico’s southeast.
In September, the 2.6 Bcf/d Sur de Texas-Tuxpan subsea pipeline, considered essential for easing gas and electricity shortages in the Yucatán Peninsula, went into operation.
Meanwhile, gas is now flowing on the Montegrande line connecting the subsea pipeline to the national Sistrangas pipeline system; and an interconnection project connecting the Sistrangas national pipeline to the Yucatan’s isolated pipeline system, the Mayakan, is also in the works.
Infraestructura Energética Nova (IEnova), the Mexico subsidiary of San Diego, Calif.-based Sempra Energy, Canada’s TC Energy Corp. and Mexican firm Grupo Carso are developing additional pipeline projects in the country.
Although the Samalayuca-Sásabe (Grupo Carso) pipeline is expected to come online early next year, the Tuxpan-Tula (TC Energy), Tula-Villa de Reyes (TC Energy), and Guaymas-El Oro (IEnova) lines all are experiencing lengthy delays due to social and other objections to their construction.
However, of the several natural gas pipeline projects under construction in Mexico, it’s the Wahalajara system that holds the most potential as an outlet for gas produced in the booming Permian Basin, according to RBN Energy LLC.
“That’s a segment that could really open up and get Permian gas that just now stops essentially in northwest Mexico…all the way to central Mexico,” RBN analyst Jason Ferguson said at the US-Mexico Natural Gas Forum in November in San Antonio, TX.