A pair of approvals by FERC last week, as well as plans announced by GDF SUEZ Mexico, could help extend the reach of natural gas pipelines — and the market for gas produced in the United States — in Mexico.
El Paso Natural Gas Co. LLC (EPNG) was given permission by the Federal Energy Regulatory Commission (FERC) to place into service its Norte Crossing facilities at the U.S.-Mexico border in El Paso County, TX. FERC last year approved EPNG’s request for a presidential permit to build Norte Crossing (see NGI, Sept. 3, 2012). Spokesman Richard Wheatley said last week the company expected to place the pipeline in service by the end of this month.
El Paso’s Norte Crossing facilities (1,500 feet of 36-inch diameter pipe) 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.
“Increased development of the natural gas infrastructure in the relevant area of northern Mexico, combined with a growing preference for gas-fired electric generation, has resulted in a shipper request for increased gas delivery to the international boundary,” EPNG said in its application at FERC. “To meet near-future growth expectations, the Mexican Comision Federal de Electricidad is proposing to build five new power plants over the next 15 years to serve new power generation loads in the states of Chihuahua, Durango and Coahuila in northern Mexico.”
On Thursday, FERC Thursday approved Kinder Morgan Texas Pipeline LLC’s (KMTP) 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 NGI, March 11).
The increase in the capability to move natural gas through the existing border-crossing facilities will be accomplished by system modifications to nonjurisdictional facilities upstream of KMTP’s border-crossing facilities, which were made to accommodate the changing flows on KMTP’s system and increased production from the Eagle Ford Shale in Texas. KMTP proposes no construction or modifications to its previously approved border-crossing facilities [CP13-94].
“The proposed amendment to increase the authorized capacity of the border-crossing facilities from approximately 425 to 700 MMcf/d will align Kinder Morgan Texas’s existing authorization’s with the projected capabilities of its intrastate system. Accordingly, the [Commission] finds that approval
of Kinder Morgan Texas’s proposal is consistent with the public interest,” the order said.
The facilities interconnect with KMTP’s intrastate pipeline in Texas and extend 878 feet to the border at the midpoint of the Rio Grande and then connect with affiliate Kinder Morgan Gas Natural de Mexico, S. de R.L. de C.V., which transports gas from the border to the Monterey area [CP13-94].
The current shipper customer of Kinder Morgan Mexico is Mexico’s Pemex-Gas Y Petroquimica Basica (Pemex), which buys gas at the U.S.-Mexico border from its affiliate, MGI Supply Ltd., to serve customers in the Monterrey area and to support its system throughout northeastern Mexico. In the United States, MGI Supply either purchases gas from KMTP at the border or ships gas to the border on KMTP’s intrastate system.
Also last week, GDF SUEZ and GE Energy Financial Services (GEFS) said they 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 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 NGI, March 18).
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 NGI, May 27). 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 NGI, Feb. 11).
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. 5, 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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