El Paso Energy reported the $35 million Samalayuca Pipeline, thefirst privately owned gas pipeline in Mexico, started operationslate last month and is flowing about 70 MMcf/d of gas from the U.S.border near El Paso to the Samalayuca I gas-fired power plant inNorthern Mexico and to consumers in the state of Chihuahua. The45-mile pipeline project, which includes 22 miles of pipe in theU.S. and 23 miles of pipe in Mexico, has a capacity of 212 MMcf/d.It is owned by a 50/50 partnership of El Paso affiliates and PemexGas Y Petroquimica Basica.

The Samalayuca II Power Plant will begin receiving gas suppliesthis year as it becomes operational in three phases. The ComisionFederal de Electricidad (CFE) requested transportation service of172 MMcf/d of natural gas through a pipeline that would transportthis energy from the United States to the Samalayuca Power plants.Pemex will transport 40 MMcf/d for customers on its system. Inaddition to the power plants, the pipeline will supply the energydemands of the cities of Juarez and Chihuahua. The Mexico portionof the pipeline is known as Gasoductos de Chihuahua.

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