Tidelands seeks permits to build gas line to Mexico

By the OGJ Online Staff

HOUSTON, Sept. 7, 2001 – More South Texas natural gas could be flowing into Mexico from a new international pipeline by the first quarter of next year, if a new expedited process works as expected.

Tidelands Oil & Gas Corp.’s subsidiary Reef International LLC has filed for construction and operating permits for a 12-in. gas pipeline, a 6-in. propane and butane pipeline, and a 6-in. standby line from Eagle Pass, Tex., into Piedras Negras, Mexico.

The pipeline will deliver product to Conagas, the Piedras Negras local gas distribution company, and certain industrial users, said Tidelands Pres. Michael R. Ward. He said the company already has another proposed international pipeline “on the drawing board.”

The US exported an estimated 64 bcf of gas to Mexico in 1999, up from 53 bcf in 1998, according to the US government, with most of it flowing through the Samalayuca pipeline, which crosses the border east of El Paso, Tex. The pipeline serves power plants near Ciudad Juarez, Mexico. Mexico is expected to be a net gas importer through 2015 as the country switches to gas-fired power plants.

Natural gas producers in South Texas have been eager to serve Mexico’s growing gas demand. The North Atlantic Free Trade Agreement (NAFTA) set Mexico’s tariff on imported gas at 10% beginning in 1993, with a annual 1% reduction through next year.

The Eagle Pass/Piedras Negras pipeline crossing is essential to meet the growing energy demands of the region, Tidelands said, and also represents the first step in refocusing Tidelands operations into a major transporter and processor of natural gas and propane and butane into Mexico.

Other US-Mexico pipelines are in the works, including a proposal by PG&E Corp., San Francisco, Calif.; Sempra Energy, San Diego, Calif.; and Mexico’s Proxima Gas SA de CV to build a $220 million, 212-mile North Baja pipeline to supply the Baja region from sources in Arizona. Service is expected by 2003.

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