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Tennessee Gas to Link with Mexico's Pemex

Tennessee Gas to Link with Mexico's Pemex

El Paso Energy's Tennessee Gas Pipeline unit agreed in principle with Pemex Gas Y Petroquimica Basica, a subsidiary of Petroleos Mexicanos, to interconnect facilities between the companies' pipelines. The new facilities will be built from the end of Tennessee's Donna lateral in Hidalgo County, TX, across the international border to Pemex's existing facilities at Reynosa, Mexico. The interconnect is expected to be in service by January 1999. The pipeline will be bi-directional throughout. For the first few years, though, gas will flow north from Mexico to the United States.

"This interconnect strengthens Tennessee Gas Pipeline's commitment to providing its customers with access to superior supplies and premier markets," said John W. Somerhalder II, Tennessee president. "This interconnect is an historic milestone that provides Tennessee Gas Pipeline customers with transportation options from the U.S.-Mexican border to the U.S.-Canadian border. We look forward to the opportunities it will provide both Tennessee Gas Pipeline and Pemex in the near term and in the future."

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

The eight miles of 24-inch pipe is expected to cost between $10 and $15 million. It is El Paso's second border crossing to Mexico. The first was the Samalayuca Pipeline, which went into operation Dec. 20 to supply gas to the Samalayuca power plant. The pipe moves 70 MMcf/d from the Hueco Compressor Station east of El Paso, TX, to Samalayuca where gas is burned by the Samalayuca I and II power plants. Additionally, the pipeline supplies the cities of Juarez and Chihuahua.

Joe Fisher, Houston

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