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Mexico-Guatemala pipeline to be extended to Honduras?

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Energy Global,

A gas pipeline between Mexico and Guatemala is likely to be extended to reach Honduras, helping the Central American country to become more competitive with cheaper energy, Honduran President Juan Hernandez said this week.

The 600 km (370 mile), US$1.2 billion gas pipeline was announced by Guatemala in January 2014. Writing on his Twitter account on Tuesday, Hernandez said the project was likely to be extended to reach Honduras. "I've asked for Honduras to be incorporated as a full partner in the Mexico-Guatemala gas pipeline; we'll sign the agreement on March 13," he wrote.

The cost to extend the pipeline to Honduras would be between US$380 million and US$400 million, Jorge Ramon Hernandez, the country's Chief Government Coordinator, told reporters, adding that it was not immediately clear how it would be financed.

Mexican state oil company Pemex and Guatemala will build a US$1.2 billion, 600 km (370 mile) gas pipeline linking the two countries and giving local manufacturers access to cheaper energy.

Home to roughly 15 million people, Guatemala does not produce natural gas. The pipeline will give Guatemalan manufacturers access to cheap Mexican gas, allowing them to become more competitive.

Mexican President Enrique Pena Nieto last month signed a bill into law that ended the country's 75 year old oil and gas monopoly. Under the new legislation, which is still being mapped out, foreign companies will be able to enter the sector, bringing expertise and efficiency to the ailing Pemex.

Edited from various sources by Elizabeth Corner

Sources: RigzoneReuters

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