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Coral Building Mexico Pipeline

Coral Building Mexico Pipeline

Coral Energy's Coral de Mexico LLC plans to build a 104-mile, 24-inch gas pipeline from the King Ranch in South Texas, crossing the Rio Grande River near McAllen, TX, and running south into Mexico in the direction of Arguelles. The FERC approved a border crossing and presidential permit for the project last week.

The bidirectional pipe will have capacity of 300 MMcf/d. Coral de Mexico is the sole owner of the U.S. portion, while Mexico's Pemex owns and will operate the portion in Mexico. The project is estimated to cost $40 to $50 million, and construction is planned to begin in early 2000. Construction bids have yet to be awarded.

"There's an infrastructure on our side of the border and there's an infrastructure on that side of the border, and we see value in linking those infrastructures," said Coral spokesman Jimmy Fox. Coral also will build a two-mile lateral to connect to the Pemex system. Pemex will own the lateral.

"We have been in discussion with Pemex for a number of years and in 1998 began in earnest to negotiate this project and signed the agreement in early 1999," Fox said.

Mexico's tariff on natural gas imports was lifted earlier this year.

Joe Fisher, Houston

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