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Pemex to Standardize Pipe Operations, Safety Practices Following Accidents

August 8, 2005
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Following a recent series of deadly accidents involving both its oil and natural gas pipelines, Mexico's state-owned oil giant Petroleos Mexicanos (Pemex) said it will spend $330 million to improve the safety of the entire pipeline network.

The project, which will standardize all operations and security practices, involves revamping pipeline safety practices at the four business units: Pemex-Refining, Pemex Gas and Basic Petrochemicals, Pemex-Exploration and Production and Pemex-Petrochemicals. No cost estimates were given.

"Although each subsidiary carries out strict maintenance programs, the system is vulnerable to events that could affect its integrity and operation," said Pemex in a statement. The initiative will take effect "immediately in all areas of the company, focusing on the operation and maintenance of the transportation infrastructure by pipeline."

Since late 2004, Pemex has suffered from a series of at least 12 accidents that have killed several people, particularly in the states of Tabasco and Veracruz. In May, workers cut into the wrong pipeline, and six men died in a blast of ammonia gas. In mid-July, two researchers from a Mexican university were killed when a 36-inch pipeline exploded near the Plagiarists maritime terminal, outside Coatzacoalcos, in Veracruz. On July 8, a explosion caused by a natural gas leak at a pipeline in Cunduacan in Tabasco killed two and injured 13. There also have been some major oil spills from Mexican pipelines since late 2004.

Greenpeace, the environmental group, issued a report earlier this year citing Pemex documents, which it said indicated that half of the 34,796 miles of pipe operated by Pemex were no longer in satisfactory operating condition.

Mexico's environmental enforcement agency, Profepa, has had limited authority to review Pemex policies because it is a state-owned monopoly. In May, Profepa CEO Jose Luis Liege said that Pemex needed to repair 35 problem pipelines, but he acknowledged that it would cost $770 million. Pemex had the money then to only repair seven.

"Our infrastructure has started to become old and tired," said Pemex's Jose Manuel Olivarez Paez, who is in charge of the oil pipelines. "There are always risks, but the key is to evaluate periodically that your pipelines are secure. There are many points where they are not secure."

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