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Engie to extend Mexican nat gas pipeline

06 Jun 2017 19:34 (+01:00 GMT)
Engie to extend Mexican nat gas pipeline

Houston, 6 June (Argus) — France's Engie will spend at least $300mn to connect its Energia Mayakan natural gas pipeline in southeastern Mexico to industrial and tourism users in Quintana Roo state.

The company will first consult with industrial and tourism-related companies to gauge uncommitted interest before holding an open season. A deadline for expressions of interest has not been announced.

The 780km pipeline currently flows natural gas from Ciudad Pemex in Tabasco state, to Valladolid in Yucatan state. Practically all of the pipeline's capacity is reserved for state-owned CFE under a 243mn cf/d contract that serves five combined cycle and thermoelectric power stations in the states of Campeche and Yucatan. A further 7mn cf/d of transport capacity is reserved for gas traders operating in the region.

Engie owns the pipeline in partnership with GE Capital and EXI CKD, a specialist energy investment fund.

Home to Cancun and the surrounding Riviera Maya, Quintana Roo state is one of Mexico's largest tourist destinations. Engie plans to extend the pipeline 160km in order to bring natural gas to the state's major urban areas as well as the industrial and hotel zones.

Engie distributes gas across Mexico and operates two combined-cycle generating plants with a total installed capacity of 312MW. The company also owns the 291km Los Ramones Phase 2 South gas pipeline, which supplies central Mexico. The pipeline has been operating significantly below its nameplate capacity of 1.4 Bcf/d for more than ten months because of an apparent design defect.

Engie expects the extended Energia Mayakan pipeline to be operational by 2020.