CFE and PEMEX Announce Ambitious Plan for Pipelines

The Mexican energy sector is immersed in a transformative process. The newly approved energy reform has established the basis for consolidating a new stage of energy development that will transform various aspects of the country, hopefully for the better.In any case, the transportation, storage and distribution of natural gas have been open to private investment since 1995. Therefore, independently of the energy reforms being discussed, the Department of Energy (Secretaría de Energía, SENER), the Federal Electricity Commission (Comisión Federal de Electricidad, CFE) and Petróleos Mexicanos (PEMEX) have been tasked with identifying new infrastructure projects for the transport of natural gas, an indispensable hydrocarbon for the electricity, oil, industrial, commercial and residential sectors. The projects that have been presented for public opinion and to investors in such sector in Mexico and in the U.S., encompass a large part of Mexico’s national territory. The specific intent of these projects it to achieve a greater availability of natural gas in Mexico and, therefore, strengthen the industrialization of the country and contribute to Mexico’s competitiveness.The five projects the CFE announced in April represent an important addition to the current capacity to transport natural gas in Northeast Mexico, which had prevented further development in such area. The new projects will further enhance the integration of the U.S. and Mexico infrastructure for transportation of natural gas, which is still a pending goal of the North America Free Trade Agreement (NAFTA). The following are the pipelines we expect to see operating in the coming future:

1. Ojinaga Pipeline - El Encino, in Chihuahua, measuring 254 kilometers, with a transportation capacity of up to 1,350 million square feet per day and an investment of approximately $400 million dollars.
2. El Encino Pipeline – La Laguna, in Durango, measuring 423 kilometers, with a capacity of up to 1,500 million square feet per day and an investment of approximately $650 million dollars.
3. Waha, Texas – Samalayuca, Chihuahua, measuring 300 kilometers, with a capacity up to 1,450 million square feet per day and an investment of $550 million dollars.
4. Waha, Texas - Ojinaga, Chihuahua, measuring 230 kilometers, with a capacity of up to 1,350 million square feet per day and an investment of approximately $400 million dollars.
5. Ehrenberg, Arizona – San Luis Río Colorado, in Arizona, measuring 160 kilometers, with a capacity of up to 130 million square feet per day and an investment of $250 million dollars.