Sempra Energy has been awarded a contract to build and operate a 530 km (329 mile) natural gas pipeline by Latin America’s largest utility, the Comision Federal de Electricidad (CFE).
Mexico City-based CFE confirmed in a recent statement that Sempra is to build the gas pipeline in northern Mexico and operate it for 25 years. The pipeline will be built in two phases, one to be completed by October 2014 and the other by July 2015, CFE added.
As a result of the lowest gas prices since 2001 in New York, imports have reached a record in Mexico, and the country with the ninth-longest pipeline infrastructure in the world is expanding its 6000 mile gas network by 40%. The growing demand for imports is forcing some pipelines to run at 95% of capacity and creating a bottleneck in some regions, prompting shortages.
Sempra’s offer of US$ 0.13/million Btu defeated bids from competitors such as Calgary-based TransCanada Corp., Korea Gas Corp. and Mitsui & Co.
The awarded pipeline contract will connect gas supplies from Arizona, USA to Guaymas, Sonora, in northwestern Mexico. Once the two phases are completed the pipeline will have a capacity of 760 million ft3/d and investments may range between US$ 630 - 730 million, according to a presentation from the state-owned oil producer Petroleos Mexicanos last month.
San Diego-based Sempra rose 0.5% to US$ 67.88 at the close in New York, the highest since 20 August.
Edited from various sources by Cecilia Rehn.