Tidelands Oil & Gas Corp. has completed the acquisition of 225 miles of large diameter Texas natural gas pipeline from ZG Gathering Ltd. Terms of the transaction including acquisition price were not disclosed. The pipeline travels through the Dimmit, Frio, Uvalde and Zavala counties of Texas. Tidelands said it plans to interconnect this new system to its existing systems, which will deliver natural gas to Tidelands proposed international pipeline crossing at Piedras Negras, Mexico.

In May, Reef International LLC, a subsidiary of Tidelands, began the permitting process to obtain state, federal and international permits for the Eagle Pass/Piedras Negras International Pipeline that will cross between El Paso, TX and Juarez, Chihuahua, Mexico (see Daily GPI, Oct. 4, 2001; May 3). According to a spokesman, the $5 million, five-mile, Texas-to-Mexico pipeline has received all necessary permits and has almost received all of its necessary financing. “We are in the process of trying to wrap up the financing on the line,” said Tidelands spokesman Bob Tucker, “and hopefully we are going to get started in the next week or two.”

The line is expected to serve the gas needs of the Juarez area, which has a population of two million and a growth rate of 25-30% a year. The company said the international crossing will be the first of its kind, transporting natural gas, propane and butane at the same crossing through a three-line network.

If construction on the Texas to Mexico line can be started in the next few weeks, Tucker said the project could be put into service sometime in November or December.

In addition to supporting its Texas-to-Mexico pipeline, Tidelands said the pipe purchased from ZG Gathering also will give it the ability to deliver gas to several other markets outside of the Maverick Basin. When interconnected, Tidelands said the newly acquired system will give it better markets than its current competitors. Including the acquisition, Tidelands now has about 400 miles of pipelines reaching from north of Laredo, TX, to south of San Antonio, TX, to the Mexico border.

“This gives Tidelands a definite competitive edge, allowing the company to pay producers more for their produced gas enabling the company to acquire produced gas more freely in the market place,” said Michael R. Ward, president of Tidelands. “This will translate into greater net profits for the company, thus increasing shareholder value.”

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