Midcoast Energy Resources Inc., Houston, said a joint venture it owns with Houston-based Associated Pipe Line Contractors Inc., called Midcoast del Bajio S de RL de CV, has been awarded a 10-year natural gas transportation contract to serve the Silao, Mexico, plant belonging to General Motors de Mexico S de RL de CV. Midcoast also announced it has reached agreement to serve the Fipasi Industrial Park, which includes facilities owned by American Axle, Weyerhaeuser Co., and Avintech.
A new pipeline to transport the gas is nearly complete, Midcoast said. The 59.1 mile, 16-in. pipeline will run from an interconnection with a Pemex Gas y Petroquimica Basica pipeline near Valtierrilla to Leon. The system will provide natural gas transportation services to parts of central Mexico that do not currently have access to natural gas, said Midcoast.
Both the Silao plant and the Fipasi Industrial Park are located in the Bajio region of central Mexico near the city of Leon, Guanajuato.
Under the terms of the contract with GM, Midcoast del Bajio will provide 100% of the natural gas requirements to the Silao plant for a 10-year term beginning in spring 2001. Midcoast del Bajio was previously granted a permit by Mexico's Energy Regulatory Commission to construct the pipeline. Substantially all of the right-of-way for the new pipeline has been acquired, the company said, adding that the area includes numerous major industrial and residential areas in addition to the GM Silao plant and the Fipasi Industrial Park.
Dan C. Tutcher, president and CEO of Midcoast, said, "This project marks our initial entry into the Mexican natural gas pipeline market and a continuation of our 'grass roots' project efforts. We are very excited to have the opportunity to serve the General Motors Silao plant and to provide natural gas service for the first time to the Bajio region. We see tremendous potential for growth in natural gas demand along this pipeline system and plan to aggressively pursue transportation agreements with other major industrial customers in the area."