GDF SUEZ Mexico and GE Energy Financial Services (GEFS) are partnering to extend the Mayakan pipeline in the Yucatan Peninsula, where Mexico’s state-owned electric utility, Comision Federal de Electricidad (CFE), has agreed to use 300 MMcf/d of natural gas in power plants currently using diesel and fuel oil.
The 24- and 16-inch diameter pipeline currently runs 700 kilometers (434 miles) from Macuspana, Tabasco, to Valladolid, Yucatan. GDF SUEZ subsidiary Energia Mayakan and GEFS plan to extend the pipeline another 75 kilometers (46 miles) from Macuspana to the Nuevo Pemex Gas Processing Plant, which is owned by Pemex Gas y Petroquimica Basica in Nuevo Pemex, Tabasco. The extension would be a 30-inch diameter pipeline, the companies said.
Preparations for construction are under way, with completion of the extension slated for June, 2014. The extension is being carried out under an existing natural gas transportation permit for Mayakan Energia.
GDF SUEZ Mexico is investing about US$92 million for a 67.5% equity stake in the pipeline, while GEFS is supplying about US$44 million for a 32.5% stake.
“This investment helps Mexico strengthen its natural gas infrastructure in the kind of critical, contracted, long-lived midstream assets we know well,” said GEFS CEO Alex Urquhart.
GDF SUEZ operates the Mayakan pipeline and has partnered with GEFS on the pipeline since 1999.
Mexico is importing increasing amounts of natural gas from the United States as demand for gas increases, particularly from power generators. Imports set a record last year, according to the Energy Information Administration (EIA). Imports now account for more than 30% of Mexico’s gas supply, and the country’s gas usage is at its highest level ever, EIA said (see Daily GPI, March 14).
Exports of natural gas from the United States to Mexico have doubled in the past three years and are likely to continue to grow for at least the next few years, according to an analysis by Barclays Capital (see Daily GPI, May 21). According to Goldman Sachs, “…assuming all the pipeline projects start on schedule, we expect U.S. exports to Mexico to grow by 0.4 Bcf/d year over year in 2013 and 0.6 Bcf/d year over year in 2014, compared to a growth rate of 0.3 Bcf/d year over year in 2012” (see Daily GPI, Feb. 11).
On Thursday, FERC approved Kinder Morgan Texas Pipeline LLC’s application to amend its presidential permit to increase the design capacity of its U.S.-Mexico border-crossing facilities from 425 MMcf/d to 700 MMcf/d (see related story). And the Federal Energy Regulatory Commission (FERC) recently gave permission for El Paso Natural Gas Co. LLC to place into service its Norte Crossing facilities at the U.S.-Mexico border in El Paso County, TX (see Daily GPI, June 18). Those facilities run underneath the Rio Grande to deliver up to 366 MMcf/d of gas to a new delivery interconnect with the Tarahumara Pipeline at the border, which in turn is to deliver the gas to new generation plants to be constructed in northern Mexico.
Last year, CFE awarded TransCanada Corp.’s Mexican subsidiary a contract to build, own and operate a natural gas pipeline across the northern part of the country (see Daily GPI, Nov. 2, 2012). TransCanada said it expected to invest approximately $1 billion in the Topolobampo Pipeline project, which is supported by a 25-year gas transportation contract with CFE. Its subsidiary, Transportadora de Gas Natural del Noroeste, will build the 30-inch diameter, 530-kilometer (329 mile) pipeline beginning in El Encino, Chihuahua State, and terminating at Topolobampo, Sinaloa State. The pipeline will have a contracted capacity of 670 MMcf/d and is expected to be online in 3Q2016.
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