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FERC Approves U.S.-Mexican Border Connection

FERC has approved NET Mexico Pipeline Partners LLC's request to build border-crossing facilities to export natural gas from the United States to meet growing demand in the power generation market in northern Mexico.

The company had requested a Section 3 presidential permit and grant authorization from the Federal Energy Regulatory Commission (FERC). MGI Supply Ltd., a subsidiary of Pemex, will be the anchor shipper on the NET Mexico facilities, using its existing Department of Energy authorization to export gas under a transportation agreement with NET Mexico.

The border-crossing facilities, which will cost about $2.7 million, will consist of about 1,400 feet of 48-inch diameter pipeline located at the center of the Rio Grande River in Starr County, TX. It will have a design capacity of 2.1 Bcf/d and a maximum allowable operating pressure of 1,480 psi.

NET Mexico said the border-crossing facilities will be a "relatively small link" in a much larger project involving the construction of an intrastate pipeline under the jurisdiction of the Texas Railroad Commission. Upstream of the border-crossing facilities, NET Mexico proposes to construct a 124-mile, 42-inch diameter intrastate pipeline, which will be anchored by a long-term firm gas transportation agreement, for up to 2.1 Bcf/d, with MGI Supply, an indirect wholly owned subsidiary of Pemex Gas y Petroquimica Basica, Mexico’s state-owned gas company. The line will run from the Agua Dulce Hub in Nueces County, TX, to a point near Rio Grande City, TX, in Starr County.

The pipeline is targeted for in-service in December 2014, according to NET Mexico.

MGI Enterprises USA LLC, an affiliate of MGI Supply, may become a new minority equity member of NET Mexico, the pipeline company said this summer (see Daily GPI, June 4). A partnership agreement has not yet been finalized.

Although NET Mexico intends to initially only transport Texas-sourced natural gas in intrastate and foreign commerce, it said it subsequently will make all the necessary filings to enable it to provide Natural Gas Policy Act Section 311 transportation service on an interruptible basis on behalf of interstate pipelines.

Mexico's imports of U.S. gas have reached new highs (see Daily GPI, March 14) and are predicted to climb as multiple pipeline projects are planned to carry gas across the border (see Daily GPI, April 16).

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