NET Midstream completes pipeline to Mexico

Market: Natural gas
18/11/14

NET Midstream has completed construction of a 2.3 Bcf/d (65mn m³/d) natural gas pipeline that aims to meet growing demand in Mexico for low-cost supplies from south Texas' Eagle Ford shale.

The 120-mile (193km) pipeline connects the Agua Dulce hub in Nueces county, Texas, to a border-crossing point near Rio Grande City in Starr county, Texas. Agua Dulce receives gas from nine pipelines and four gas processing plants. The new pipeline is anchored by long-term agreements with MGI Supply, an affiliate of the Mexico's state-controlled oil and gas company Pemex.

The project is one of several pipelines that are targeting growing demand in Mexico — where that demand is outstripping production and creating an outlet for the glutted US gas market. The Eagle Ford is one of the fastest growing US oil and gas fields and a key new source for pipeline exports to Mexico.

US pipeline exports of gas to Mexico hit a record high on 24 July of 2.5 Bcf/d, according to the US Energy Information Administration (EIA).

Natural gas demand in Mexico is forecast to rise by 4.7 Bcf/d between 2012 and 2027. The gains in the power generation sector will be the largest, comprising about three-quarters, or 3.5 Bcf/d, of that increase, Mexico's energy ministry and the EIA have said.

Construction of the pipeline was completed before its initial in-service date of 1 December 2014. The pipeline will begin operations with 50,000hp of compression and will ramp up to 114,000hp in late 2015, privately held NET Midstream said.

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NET Midstream completes pipeline to Mexico

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