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Tidelands Begins NEPA Prefiling Process on 2 Large Border Crossing Pipelines

May 30, 2005
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San Antonio-based Tidelands Oil & Gas Corp. initiated the pre-filing process at FERC under the National Environmental Policy Act (NEPA) for the United States portion of its proposed Burgos Hub Export/Import Project, which is expected to lead to development of Mexico's first natural gas market hub, gas storage field and offshore Gulf of Mexico liquefied natural gas (LNG) import terminal.

The project will involve construction of several new gas transmission pipelines in both the United States and Mexico. It will include two 30-mile pipelines that will carry up to 500 MMcf/d each across the border. The two U.S. pipelines 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 Gulf Terra. 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 a 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 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.

The U.S. pipeline project is roughly "V" shaped, with the two legs of the "V" commencing in south Texas and then intersecting in the Burgos Hub Area of northeastern Mexico near the proposed natural gas storage field Tidelands is planning.

Sonora Pipeline LLC, a wholly owned subsidiary of Tidelands Oil & Gas, will build and operate the U.S. portion of the pipeline project, and an affiliate, Terranova Energia, will construct and operate the Mexican portion. Initially, gas flows into the pipeline system will be in a southerly direction into Mexico. But later, it is anticipated that gas flows will be reversed after Tideland's proposed HiLoad LNG import facility is connected to the new storage field (see NGI, April 25, April 4, March 28).

The project will serve growing residential, commercial and industrial demand for natural gas in northeastern Mexico and in the longer term also will serve demand growth in the United States.

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