PG&E, Sempra Seek Approval of Baja Project
PG&E National Energy Group, an affiliate of PG&E Corp.,
last week formally filed an application at FERC seeking the green
light to build the U.S. leg of a 215-mile natural gas pipeline that
would extend from the Arizona-California border through northern
Baja in Mexico.
In joint partnership with Sempra Energy International, PG&E
National Energy proposes to build a 500,000 Dth/d, mostly 30-inch
pipeline to serve the growing gas demand of large industrials and
power generators in northern Mexico. The deal also includes
participation by the Mexican firm, Proxima Gas SA de CV.
The pipeline is expected to bring some relief to the strained
natural gas pipeline infrastructure in the southern end of
California as well. The companies hope to begin construction of the
$230 million line in early 2002, and have it in operation by the
third quarter of that year.
"Support for the project remains very strong," said Thomas B.
King, president and COO of PG&E National Energy Group, West
Region. So much so that PG&E and Sempra Energy increased the
initial capacity of the proposed pipeline by 100,000 Dth/d in the
FERC application, and expanded the diameter of the first 12-mile
link in the U.S. to 36 inches.
A PG&E spokeswoman estimated the companies already have
signed four precedent agreements for 300,000 Dth/d with Energia
Azteca, a subsidiary of InterGen, as well as subsidiaries of
PG&E National Energy Group and Sempra Energy International. The
companies said they currently are negotiating with other potential
The agreements include some "limited conditions," such as
PG&E and Sempra Energy getting full FERC certification, the
spokeswoman said, noting that the companies feel they have "clear
support from the market."
"We looked at the gas supply options for our generating plants
in Mexicali, including the option of building our own pipeline, and
concluded that the North Baja project presents the most
cost-effective means for reliably meeting our requirements," said
Phillip Cantner, InterGen's vice president of development for Latin
The proposed pipeline would begin at an interconnection with El
Paso Natural Gas, near Ehrenberg, AZ, cross southeastern California
and northern Baja in Mexico, and terminate at an existing pipeline
system in Mexico - Transportadora de Gas Natural.
PG&E National Energy Group will be in charge of the
permitting and development of the 80-mile U.S. portion of the
pipeline, while Sempra Energy will direct the permitting and
development of the 135-mile Mexican leg, according to the
Richard Nemec, Los Angeles; Susan Parker