Two California utilities have proposed providing natural gas transportation services to Mexico.
The arrangement would provide a second U.S. export sales point at the U.S.-Mexico border and perhaps help alleviate an expected surplus of gas pipeline capacity available to California. Mexico currently imports about 200 MMcfd of U.S. gas via pipelines in Texas (OGJ, Feb. 3, p. 16).
PROPOSAL
In a proposal to Mexico's state oil and gas company Petroleos Mexicanos, San Diego Gas & Electric and Southern California Gas Co. outlined two options for providing gas transportation services but emphasized they would consider other options.
Initially, gas would be provided to a state owned electric utility for use in northern Baja California power plants.
Under the first option, deliveries would be 24 MMcfd the first year, increasing to 144 MMcfd in the second year. That calls for construction of a 2 mile, 30 in. spur from SDG&E's grid near the Otay Mesa region of San Diego County to a point at the U.S.-Mexico border near Tijuana for initial deliveries. For expanded deliveries under the first option, SDG&E would have to construct 6 1/2 miles of 24 in. loop line from SDG&E's grid near the South Bay power plant in southern San Diego to a point at the U.S.-Mexico border. Pemex would be required to build a pipeline on the Mexican side of the border to the Baja California power plants. Deliveries could start within a year after an agreement is signed.
Under a second option, SDG&E and SoCalGas would provide large scale, long term transportation service for volumes of 50-500 MMcfd. That would involve constructing a main transmission line of 16 and 36-42 in. more than 100 miles from the SoCalGas main line at the Riverside County-San Diego County border to a point on the U.S. Mexico border. Both utilities would be involved in building the line. Under this option, deliveries would begin 3 years after an agreement is signed.
The utilities would serve as transporters of gas Pemex purchased from California or out of state producers. They also would provide underground storage or other operating services as needed.
BENEFITS
One of the ways Mexico is trying to alleviate its severe air quality problems is by backing out consumption of fuel oil-often high sulfur fuel oil-in industrial and power plant boilers.
The bulk of industrial expansion in Mexico is occurring in an industrial corridor along the U.S.-Mexico border, where there is little gas transportation infrastructure to serve the rapidly mushrooming so-called maquiladora industries.
The two utilities also point to a surge in pipeline capacity available to California in the next 2-3 years that will be bringing big new volumes of Canadian and Rocky Mountain gas to California (see story, p. 19). They contend that increased pipeline capacity will be more than California alone can absorb.
The utilities plan to share data gleaned from years of purchasing and transporting gas from Canadian and U.S. suppliers with Mexican officials in an effort to boost project feasibility.
The project also would require approvals from the Federal Energy Regulatory Commission and the California Public Utilities Commission.
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