KN Energy began an open season for its a 108-mile, 24-inchMonterrey Pipeline that would connect its MidCon Texas intrastatepipeline in Starr County, TX, to Monterrey, Mexico. The open seasonbegan yesterday and runs through 5 p.m. CDT July 30.

KN expects to start construction of the $50 million pipeline in1999, with completion projected for the second quarter of 2000.Capacity is expected to be 275 MMcf/d, and the pipe will servegas-fired power plants in Monterrey, local distribution companies,large industrial consumers as well as future market opportunities.

“Mexico’s expanding natural gas market, with consumption growingby as much as 9% annually, requires expanded infrastructure and gascommodity imports,” said Bill Garner, KN International executivevice president.

“The Mexican government’s efforts to open this market – such asthe recent lifting of a 4% import tariff on natural gas – arepositive factors toward increasing our activity in Mexico,” Garnersaid. “These efforts increase competitive opportunities forcompanies like KN, which has built a strong presence in Mexico, tomeet the growing needs of residents, industry and power-generatingcompanies.”

Mexico’s energy regulatory commission has approved a maximumrate for transportation service on the pipeline, about 16cents/MMBtu, said Delia Gallardo-Barnett, KN business developmentanalyst. The company is not disclosing other rate information. Onlyrecently have rates for transportation on Pemex pipelines beenpublished as part of the pipes’ general terms of service, she said.

Mexico’s third-largest city, Monterrey is the industrial centerof the country and one of the largest gas markets in Latin America.The pipeline will serve a couple different distribution companiesas well as a number of industrial plants. However, the big draw forgas is power generation as several new power plants are planned inthe next four years.

KN’s other projects in Mexico include Gas Natural del Noroeste,the first local distribution company hooking up residents andcommercial customers in Hermosillo, a city of 500,000. KN also is apartner in Igasamex, a gas pipeline connection/marketing company inMexico City bringing service to industries in central and southernMexico.

For information on the open season, call Enrique Velasco, KNInternational director of marketing, in Mexico City at(525)261-8109.

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