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Mexicali to get Mexico's first private gas distribution service

April 8, 1996

Mexico's Energy Regulatory Commission has designated the border city of Mexicali as the first Mexican city in which a private company will offer natural gas distribution service. The disclosure came from Energy Sec. Jesus Reyes Heroles. The bid tender will begin soon. The winning bidder will receive a 12 year exclusive contract to transport and deliver natural gas in the city's service territory. The contract will not grant exclusivity for marketing the gas.

Mexico's Energy Regulatory Commission has designated the border city of Mexicali as the first Mexican city in which a private company will offer natural gas distribution service.

The disclosure came from Energy Sec. Jesus Reyes Heroles. The bid tender will begin soon.

The winning bidder will receive a 12 year exclusive contract to transport and deliver natural gas in the city's service territory. The contract will not grant exclusivity for marketing the gas.

Mexicali has more than 500 industries, from small maquiladora plants-essentially border town factories set up under liberalized export rules prior to passage of the North American Free Trade Agreement-to giant cement and steel producers.

A list of another 20 cities where private investors will be allowed to offer gas distribution services will be disclosed in coming months, Reyes said.

Mexico's natural gas sector is being opened to private participation as a result of legislation passed in recent years (OGJ, Dec. 4, 1995, p. 36).

Among companies that have expressed an interest in participating in Mexico's gas distribution market are Gutsa, Mexico City; TransCanada PipeLines Ltd., Calgary; NorAm Energy Corp., Houston; and MidCon Corp., Lombard, Ill.