After being on the drawing board of several companies for more than eight years, a 95-mile natural gas pipeline system to Monterrey, Mexico, from South Texas finally went into service last week. Kinder Morgan Energy Partners LP (KMP) said its new Mier-Monterrey gas pipeline was placed into service March 20 and is transporting 375 MMcf/d under a 15-year contract with Pemex Gas Y Petroquimica Basica (PGPB).

“Completing construction of this pipeline on budget and ahead of schedule is a tremendous accomplishment,” said KMP Chairman Richard D. Kinder. He noted the $87 million project is expected to be immediately accretive to cash available for distribution to KMP’s unitholders.

The 95-mile pipeline, which interconnects with the southern end of Kinder Morgan’s Texas intrastate system in Starr County, serves one of Mexico’s fastest growing industrial areas. The pipeline connects to a 1,000 MW power plant complex near Monterrey and to the PGPB natural gas transportation system. Initial projections called for construction of the PGPB pipeline to be completed in mid-April. Pemex is buying its gas at the U.S.-Mexico border from MGI Supply Ltd.

Kinder Morgan Inc. acquired the Monterrey project when it bought KN Energy in 1999 (see Daily GPI, Aug. 4, 1999). It then resold the pipeline, along with some other Mexican assets to its master limited partnership, KMP, early in 2000. KMP subsequently increased the diameter of the proposed pipeline and export facilities to 30 inches from 24 inches and received final FERC approval last September (see Daily GPI, Sept. 19)

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