Recent News

In the Pipeline: More Cross-border Gas

As Mexican and US trade increases, an increasing number of cross-border natural gas pipelines are being built, and exports are way up. All of these pipelines, and there are more than 20 in operation now, are regulated by the Federal Energy Regulatory Commission (FERC) which is part of the US Federal Department of Energy. They also review and authorize all of the US’s liquefied natural gas terminals, and interstate pipelines within the United States.

In general, these pipelines have proceeded through the qualification process without much controversy. There are rising murmurings about the extent to which low priced natural gas is actually delaying the development of cleaner and renewable energy sources but at this writing the controversy is considered minimal.

US-Mexico pipelines doubled their capacity in less than the past ten years. About 4.9 billion cubic feet of natural gas could be moved per day, in export to Mexico (at capacity). And that capacity will likely double again by the end of 2016. Though some 60 private companies have had proposed pipeline projects approved, again, by and large they’ve met little resistance in the regulatory process.

Transnational oil pipelines are another story. A bit more colorful history routes crude oil through the U.S. Department of State and Presidential permitting. The recent Keystone XL pipeline controversy is likely to color similar projects for years to come. Although, the US does, again, export a very limited amount of crude oil after years of federally enforced prohibition, a trickle has been seen meeting the high hurdle in recent years.

Two pipeline currently deliver refined petroleum back into Mexico from the US and there has been some talk of lifting the Presidential requirement altogether. A sharply divided congress is not likely to review the issue again although a number of related bills did move through the Senate and the House during the 114th congress.

Natural gas piplines, though, are full steam ahead. One new project will connect the Waha gas hub to electricity generation plants in southern Chihuahua, Mexico. Similar 200 mile long project will connect Coyanosa, Texas and cross at a new international border-crossing near San Isidro, Texas. Most natural gas being exported to Mexico is used to fuel cogeneration power plants constructed (or under construction as an alternative to abandoned plans for nuclear power plants.

Mexico’s and Pemex & CFE standards are being translated and updated to better work with US and internationally contracted firms, not only on these pipelines, but in some cases, to better serve refineries such as those at Minatitlan, Salamanca and Tula. These refinery projects are also building separate and purely domestic pipelines. In most cases, their being retrofitted either to run off of cleaner fuels, but also to produce cleaner fuels for the expanding Mexican market. In every case, international firms are needing to familiarize themselves with the details of the Pemex contracts, and the Mexican Official Standards (Pemex Normas de Referencia) and many of these are available in translation.

Leave a Comment