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Tidelands Receives Initial Permits for Two 500 MMcf/d Border Crossing Pipelines

April 25, 2005
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It took the Texas Railroad Commission (RRC) two days to issue permits to Tidelands Oil & Gas for the Progresso International Pipeline and the Mission International Pipeline, two 30-mile pipelines that will carry up to 500 MMcf/d each across the Mexican border to Tideland's proposed gas storage field and its other proposed Mexican gas infrastructure.

The company plans to build several large diameter pipelines south of the border, as well as the country's first gas storage field and an offshore liquefied natural gas (LNG) import terminal. The next step in the process will be a filing with FERC for U.S. pipeline certificates, which will take at least several months. Tidelands already has filed an application with Mexican authorities for its backbone pipeline mainline south of the border.

"Our established relationships with the Railroad Commission of Texas and those with which we have engaged ourselves, enabled this permitting process to be expeditiously approved," said Tidelands CEO Michael Ward. "We look forward to executing our business plan and taking the necessary steps to bring our projects to fruition."

The pipelines receiving RRC permits include the proposed Progresso International Pipeline system, which will run from the Rio Grande to Donna Station with potential interconnects with Texas Eastern Gas Transmission, Tennessee Gas Pipeline and Texas Gas Transmission. It will extend 17 miles into Mexico and 10 miles into the U.S.

The other system, Mission International Pipeline, will run from the Rio Grande to the Valero Gilmore Plant with potential interconnects with Houston Pipe Line, Calpine, Kinder Morgan Texas, El Paso and GulfTerra. The line will extend 52 miles into Mexico and 25 miles into the U.S. Both pipelines each will have a maximum capacity to flow 500 MMcf/d and are designed to be bidirectional allowing for the delivery of natural gas from the U.S. into Mexico or vice versa.

A Tidelands subsidiary filed an application in March with the Comision Reguladora de Energia (CRE) in Mexico for a permit to build the 1 Bcf/d Terranova Oriente pipeline system, a 160-mile bidirectional pipeline that will form the backbone of the Tidelands project in Mexico. The company also intends to file soon for permits to construct three other parts to the project: the Terranova Occidente pipeline, which will extend from a connection with the Terranova Oriente system to the city of Monterrey; the 50 Bcf Brazil gas storage field in Rio Bravo, Tamaulipas; and the $150 million Dorado HiLoad regasification terminal 35 miles offshore.

Ward expects multiple additional announcements in the coming weeks regarding the steps required to get the pipeline, LNG and storage portions of the company's project in place. He said recently the company expects to have all of its needed pipeline permits within the next few months so that it can begin construction and have its project in service by January 2008. Experts say the ambitious project would be a significant step in the development of Mexico's northeastern gas market.

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