El Paso Energy’s Tennessee Gas Pipeline unit agreed in principlewith Pemex Gas Y Petroquimica Basica, a subsidiary of PetroleosMexicanos, to interconnect facilities between the companies’pipelines. The new facilities will be built from the end ofTennessee’s Donna lateral in Hidalgo County, TX, across theinternational border to Pemex’s existing facilities at Reynosa,Mexico. The interconnect is expected to be in service by January1999. The pipeline will be bi-directional throughout. For the firstfew years, though, gas will flow north from Mexico to the UnitedStates.

“This interconnect strengthens Tennessee Gas Pipeline’scommitment to providing its customers with access to superiorsupplies and premier markets,” said John W. Somerhalder II,Tennessee president. “This interconnect is an historic milestonethat provides Tennessee Gas Pipeline customers with transportationoptions from the U.S.-Mexican border to the U.S.-Canadian border.We look forward to the opportunities it will provide both TennesseeGas Pipeline and Pemex in the near term and in the future.”

Pemex made a 10-year commitment for 185,000 dth/d of firmcapacity on Tennessee. The companies expect to execute finalagreements in the next few weeks and begin construction of thefacilities later this year after receiving regulatory approvals.

The eight miles of 24-inch pipe is expected to cost between $10and $15 million. It is El Paso’s second border crossing to Mexico.The first was the Samalayuca Pipeline, which went into operationDec. 20 to supply gas to the Samalayuca power plant. The pipe moves70 MMcf/d from the Hueco Compressor Station east of El Paso, TX, toSamalayuca where gas is burned by the Samalayuca I and II powerplants. Additionally, the pipeline supplies the cities of Juarezand Chihuahua.

Joe Fisher, Houston

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