Efforts by Sonora Pipeline LLC, a subsidiary of Tidelands Oil & Gas, to win expedited approval of its proposed Burgos Hub Export/Import facility in northeastern Mexico may be in trouble at FERC.

In a letter sent to Sonora Pipeline Wednesday, the staff of the Federal Energy Regulatory Commission expressed “concern about the lack of Sonora’s progress” in the agency’s pre-filing process for the project, which was initiated around June (see Daily GPI, May 27). An initial draft resource report submitted by Sonora in August failed to meet many of the requirements for environmental reports, and data requests of the Commission have gone unanswered by the company, according to staff.

“Please reassess whether the pre-filing process is appropriate for the Burgos Hub Export/Import project at its present stage of development. Sonora can withdraw from the process now and reenter at a later time,” FERC said [PF05-15]. “If Sonora decides to continue under the current review, within 10 days of this letter, Sonora should provide a project status report detailing its project activities… Sonora should also include a new schedule for the project that incorporates the submittal of revised draft resource reports.”

FERC’s National Environmental Policy Act (NEPA) pre-filing review covers the U.S. portion of the Burgos Hub Export/Import project, which, if approved by the agency, could eventually lead to the development of Mexico’s first natural gas market hub, gas storage field and offshore Gulf of Mexico liquefied natural gas (LNG) import terminal. The proposal calls for the construction of two large border-crossing gas pipelines. The project would be roughly “V” shaped, with the two legs of the “V” commencing in South Texas and then intersecting in the Burgos Hub area of Mexico near a new gas storage field that has been proposed in that region.

San Antonio, TX-based Tidelands’ Sonora Pipeline would construct and operate the U.S. leg of the pipeline project, and Tidelands’ corporate affiliate, Terranova Energia S. de R.L. de C.V., would build and operate the Mexican portion. It is initially envisioned that gas flow in the system would be in a southerly direction into Mexico, and later the flow would be reversed as a new LNG facility is connected to the storage field, the company said.

The project would serve to alleviate the growing demand for natural gas in Northeastern Mexico, Tidelands noted. In the longer term, the project would ease the growing demand for gas in the United States by providing a means for LNG that is offloaded in Mexico’s offshore waters to be imported into the U.S., it said.

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