FERC has asked the secretaries of State and Defense to favorably consider a presidential permit for Sonora Pipeline LLC, a subsidiary of Tidelands Oil & Gas, to construct bidirectional border-crossing pipeline facilities between the United States and Mexico.

"The Federal Energy Regulatory Commission finds that the issuance of a permit is appropriate and consistent with the public interest," the agency said in a draft copy of a presidential permit, which accompanied letters to Secretary of State Condoleeza Rice and Defense Secretary Robert Gates.

The U.S. portion of the pipeline project, to be located in South Texas, would provide an interconnect between the North American gas pipe grid and gas supplies and markets in northern Mexico. Tidelands' Sonora Pipeline would own and operate the U.S. part of the system, while Terranova Energia S de RL de CV, Tidelands' Mexican subsidiary, would own and operate the system in Mexico.

The so-called Northeast Hub project would include two lines -- the Mission Line, a 172-mile, 30-inch diameter pipeline that would extend from the Gilmore Plant in Hidalgo County, TX, to markets in the city of Monterrey, Mexico; and the Progresso Line, a 65-mile, 30-inch diameter system that would run from the Donna Station in Hidalgo County to the proposed Campo Brazil storage facility in the Burgos Hub area in northern Mexico. The combined capacity of the two lines would be approximately 1 Bcf/d, according to Tidelands.

It is initially envisioned that gas flow in the system would be in a southerly direction into Mexico, and later the flow would be reversed as a new liquefied natural gas (LNG) project is connected to the storage field, the company said.

Sonora is seeking a presidential permit for border-crossing facilities on both the western and eastern legs of the proposed pipeline. The border-crossing facilities for the western leg, or Mission Line, consist of about 85 feet of 30-inch diameter natural gas pipeline and associated facilities. The border crossing facilities for the eastern leg, or Progresso Line, consist of 135 feet of 30-inch diameter pipeline and associated facilities.

Within Mexico, Terranova's continuation of the western and eastern legs would intersect near the Camp Brazil Storage Facility that is being developed in the Burgos Hub area of Mexico. In May 2006, Terranova received approval from Mexican authorities for its portion of the western and eastern legs within Mexico.

The project would serve to alleviate the growing demand for natural gas in northeastern Mexico, according to Tidelands. And in the longer term, it would ease the growing demand for natural gas in the United States by providing a means for LNG that is offloaded in Mexico's offshore waters to be imported into the U.S., it said.

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