Tidelands Oil & Gas Corp. has entered into an agreement with Petroleos Mexicanos y Sus Organismos Subsidiarios (Pemex), Mexico’s state-owned petroleum company, to design, build and operate an underground natural gas storage facility and related surface equipment for Pemex near Reynosa, Tamaulipas, Mexico.

Looking to improve its delivery of energy-related products to its industrial and residential customers, Mexico has been exploring the possibilities of developing with private investors, as authorized by law, storage facilities for natural gas apart from its main pipeline grid. Pemex believes that the construction of these underground facilities will fit the bill.

“Our company is honored to have the opportunity to work with PEMEX and Mexico, and to assist in projects designed to improve the delivery of energy-related products to our neighbors in Mexico,” said Michael Ward, CEO of Tidelands Oil & Gas Corp. “This Memorandum of Understanding represents our aspiration to participate in enterprises that will have a positive impact on our company as well as the customers and areas we serve. We are enthused by our ability to develop close working relationships with Pemex and Mexico, and look forward to additional projects that will further increase the validity of Tidelands’ business model.”

The storage facility deal furthers San Antonio, TX-based Tidelands’ participation in Mexico. Its other ventures there include its Reef International LLC natural gas pipeline crossing at Eagle Pass, Texas and Piedras Negras, Mexico, which officially opened on Nov. 1, 2003 (see NGI, Sept. 29). This project was developed in partnership with Impact Energy Services LLC and is currently supplying the natural gas demand for the local natural gas distribution utility in Piedras Negras, Coahuila. Significant future expansion in volumes transported through this pipeline is anticipated.

“We assigned a high priority to this project, since Pemex is developing storage facilities in the southeast of Mexico that will allow us to balance our natural gas pipeline systems from the southeast to Mexico City,” said Lic. Reynaldo Jauregui Zentella, subdirector de Alianzas y Nuevos Negocios, with the Direccion Corporativa de Planeacion Estrategica for Pemex. “Still pending is a strategic facility that will not only allow Pemex E&P more flexibility in its production plans in the Burgos basin, but eventually support the northeast natural gas pipeline system.”

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