Mexico’s state power utility Comisión Federal de Electricidad (CFE) last Thursday announced the long-awaited start of commercial operations on Fermaca’s 886 MMcf/d Villa de Reyes-Aguascalientes-Guadalajara (VAG) pipeline system.

VAG constitutes the final leg of Fermaca’s larger Waha-to-Guadalajara or “Wahalajara” system, which transports gas from the Permian Basin in West Texas to the industrial center of Guadalajara in the Bahío region of central-western Mexico.

CFE is the anchor customer for Wahalajara under a long-term, take-or-pay firm transport capacity agreement.

The completed system will allow the region to access “the cheapest natural gas in the world,” CFE said.

The 388-kilometer (241-mile), 36-inch diameter VAG segment will supply gas directly...