Mexico's Pemex to build most of Ramones II pipeline project

Reuters

MEXICO CITY, Oct 25 (Reuters) - Mexico's state-run oil andgas monopoly Pemex will develop most of the second phase of LosRamones, the country's largest natural gas pipeline project onits own, after failing to outsource it earlier this month, thecompany said on Friday.

Pemex, which had rejected the sole bid from a consortium inan auction, said in a statement it will split the remainder ofthe proposed pipeline in two.

One part will be developed alone by Pemex and the other by ajoint venture between French energy firm GDF Suez andPemex's TAG Pipelines unit.

The pipeline due to run from the U.S.-Mexico border tocentral Mexico is the country's biggest energy infrastructureinvestment in decades, and designed to help satisfy growingdemand for gas by boosting cheap imports from the United States.

Once completed by the end of 2015, the entire 2.1 billioncubic feet (bcf) per day Ramones pipeline is scheduled to supplya fifth of Mexico's total natural gas demand.

Pemex said Ramones North, a 441 kilometer (274 mile) sectionextending from the town of Los Ramones in Nuevo Leon state tothe city of San Luis Potosi, will be carried out in-house by twoof its subsidiaries, TAG Pipelines and Gasoductos de Chihuahua.

Estimated investment for the section, which will include twogas compression stations, is $1.05 billion.

Meanwhile, Ramones South, a 287 kilometer (178 mile)section, will take the pipeline further into Mexico's industrialheartland, from San Luis Potosi to Guanajuato state, and includeanother compression station.

Pemex said on its Twitter page that the southern sectionwill be developed jointly by GDF Suez and TAG Pipelines. It isexpected to cost $795 million, Pemex said.

The company added that it is "analyzing various options toinvolve the participation of certain companies as partners" onRamones South, but did not elaborate.

IEnova, a unit of U.S. energy company SempraEnergy, is already developing the first phase of theRamones pipeline along with a Pemex subsidiary.

Once both phases are completed, the Ramones pipeline willextend 750 miles (1,200 km) from Agua Dulce, Texas, across theborder and deep into central Mexico. Agua Dulce is located nearthe booming Eagle Ford shale gas deposit in southern Texas.

Mexico's current natural gas imports from the United Statesare tapped out at about 1.4 bcf per day.

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