Yucatan pipeline signals new era in Mexican gas transportation

Field-joint coating and inspection takes place ahead of lowering in along one of the rugged areas on the Yucatan gas pipeline (Fig. 2). Photograph from Bechtel de M?xico, Mexico City.

• Additional lengths of pipe, concrete coated, are pulled through one of the swampy areas (Fig. 3). Photograph from Bechtel de M?xico, Mexico City. [46,642 bytes]
• Construction advances along rocky right-of-way in the Mexican states of Yucatan and Chiapas as the Yucatan Peninsula gas pipeline makes progress toward September 1999 start-up (Fig. 4). Photograph from TransCanada PipeLines Ltd., Calgary. [22,569 bytes]

By fourth quarter this year, a major new pipeline will be flowing gas to power generators serving industrial and residential consumers in the Yucatan Peninsula of Mexico.

The project is important because it is the first major installation by a consortium whose majority stakeholder is a foreign company.

The Yucatan Peninsular gas pipeline will move gas from a processing plant in the Mexican state of Tabasco to several power plants in the Yucatan Peninsula and to other customers along the pipeline.

The project commenced construction in February 1998, and initial deliveries are expected by the end of September 1999.

The pipeline will be approximately 410 miles long with an initial capacity of 7.4 million cu m/day (MMcmd; 261.2 MMcfd), increasing to an ultimate capacity of 10.4 MMcmd by 2012.

Total initial investment in the pipeline, according to Energía Mayakán S. de R.L. de C.V., the consortium building it, will be $260 million (U.S.), growing to $276 million by 2004.

Energía Mayakán

The consortium consists of Trans Canada PipeLines Ltd., Calgary (62.5%), Merida Pipeline Ltd., an affiliate of InterGen (32.5%), and Gutsa Construcciones S.A. de C.V. (5%).

In March 1997, Comisi?n Federal de Electricidad (CFE), Mexico's national electric utility, awarded a contract to build, own, and operate the Yucatan Peninsula gas pipeline to Energía Mayaká n. On Apr. 9, 1997, Energía Mayakán signed the transportation contract with CFE to build and operate the natural-gas pipeline and provide transportation services to CFE for 26 years.

The pipeline will receive natural gas from a gas plant at Ciudad Pemex operated in the state of Tabasco by Pemex Gas y Petroqu!mica B sica (PGPB) and deliver it to several power plants in the states of Campeche and Yucatan and to other customers along the pipeline (Fig. 1 [118,679 bytes]).

The power plants are being converted from fuel oil. Conversion of approximately 655 MW of existing power generation to natural gas is under way along with construction of 855 MW of new natural-gas-fired power generation.

This project, says Energía Mayakán, will therefore provide a clean, low-cost energy alternative to fuel oil and diesel, help meet CFE's demand for an efficient fuel-transportation system, and provide employment for skilled workers and laborers during construction and operations.

The first compressor station and gas conditioning and measurement facilities will be installed at the reception point of the pipeline at Ciudad Pemex by September 1999 with the rest being completed during the life of the project, says the consortium.

Energía Mayakán expects initial flows in 1999 to be 3.45 MMcmd increasing to 7.36 MMcmd in 2000, 8.70 MMcmd in 2005, and 10.4 MMcmd by 2012.

Mexican power plans

Comisi?n Reguladora de Energía (CRE), created by the Mexican government to regulate the country's emerging natural-gas industry, is regulating the Energía Mayakán project.

Environmental approvals and compliance during construction and operations are being regulated and monitored by the Instituto Nacional Ecolog!a (INE).

As stated, the pipeline will transport natural gas to several CFE power plants in the states of Tabasco, Chiapas, Campeche, and Yucatan, and creates the possibility of moving gas into the growing energy market in the state of Quintana Roo and the tourist industry in Cancun.

The consortium says that gas not contracted to power plants will be available to other third-party industrial and residential customers.

CFE plans to increase Mexico's electricity-generating capacity by 13,000 MW by 2004 using natural gas; Energía Mayakán's gas pipeline will contribute to this goal.

A new 400-MW power plant in Merida, state of Yucatan, will be the first plant supplied by natural gas from the consortium's pipeline.

Optimization, pipeline control

Energía Mayaká n used an optimization hydraulic model to determine the basic Yucatan pipeline system design needed to meet the gas-transportation forecast demand of CFE through the 26-year contract.

The consortium says that the system design, selected for optimum efficiency as well as CFE's rigorous reliability requirements, provides a pipeline of three diameters: 24-in. OD for the first 157.5 miles, reducing to 22 in. for the next 157.5 miles, and finishing with 95 miles of 16-in. pipe.

Compression for the line would be built in three phases to match the build up of gas-delivery demand from CFE. The first station is being built for initial start-up this year, the second in 2004, and the third in 2009.

The system will include receipt, measurement, and control equipment at the receipt station, as well as block valves, pig launchers and receivers, cathodic protection, supervisory control and data acquisition (scada) and leak-detection systems, maintenance facilities, warehouse, and a control center at the first compressor station.

The custody-transfer measurement station will be installed just outside the interconnection with PGPB at Ciudad Pemex. Gas filtration, preheating, regulating, and measurement facilities are being installed adjacent the new Merida III plant, currently being constructed, for both that plant and the existing Merida II power plant.

Measurement stations are also being installed at Valladolid for the existing combined-cycle plant which is to be converted and in Campeche for another new plant to be built in 2000. Energía Mayakán says other stations will be connected as required by future phases at Lerma (Campeche), Nachicocom (Merida), and Valladolid II as these plants are also converted to natural gas.

Aside from launcher and receiver facilities required by PGPB for the short section of line at the interconnection point, the system includes launchers and receivers able to run pigs between the current and future compressor station sites and the line terminus.

Intermediate block valves are located at approximately 20-mile intervals along the line, equipped with automatic closure capability that uses line-pressure sensing.

Measurement and control of the system will use satellite-based communication for the scada system linking the receipt and delivery stations and compressor-station information to the control room at the compressor station.

Construction

Energía Mayak àn awarded Bechtel Inc., Houston, an engineering, procurement, and construction (EPC) contract for all of the project.

Bechtel de M?xico, Mexico City, is the construction contractor for the spread that as of Jan. 30, 1999, was approximately 70% complete and on schedule for start-up at the end of September 1999. Bechtel de M?xico is the prime contractor for all EPC activities, and Gutsa Construcciones S.A. de C.V., Mexico City, was subcontracted in January 1998 to construct the first 57.1 miles of this spread.

Bechtel issued the design-basis memorandum late in 1997, using CFE bidding guidelines and Energía Mayakán's bid-proposal documents.

The memorandum is the engineering guide that establishes basic design parameters and assumptions used throughout the project. It is based on the initial engineering requirements and preliminary design and incorporates all applicable technical code and regulatory requirements.

Pipeline construction currently under way consists of two spreads, each starting at either end of the pipeline.

* The first spread, at Ciudad Pemex, started in February 1998 and built 57.1 miles of 24-in. OD pipeline that ended at the Usamcinta River. Construction of that first spread is complete and in final stages of drying following the successful hydrostatic tests.

* The second spread started in March 1998 at the northeasterly end at Valladolid, Yucatan, and will build 352.9 miles of pipeline consisting of 16, 22, and 24-in. OD pipe.

Line pipe, compression

The pipeline is of a telescoping design, says Energía Mayakàn, consisting of approximately 157.5 miles of 24-in. OD pipe, 157.5 miles of 22-in. OD pipe, and 95 miles of 16-in. OD pipe.

All pipe has a specified minimum yield strength (SMYS) of 448 MPa (Grade X-65) and is manufactured to the API 5L, Edition 41 specification.

The pipeline was designed in accordance with ASME B31.8 and other applicable norms in Mexico. Wall thicknesses vary to accommodate land use and population density along the pipeline route:

• For the 24-in. pipe, minimum wall thickness is 0.308 in., up to 0.444 in. for locations where heavier-walled pipe is necessary.
• For the 22-in. pipe, minimum wall thickness is 0.283 in., up to 0.407 in. where heavier-walled pipe is necessary.
• And, for the 16-in. pipe, minimum wall thickness is 0.250 in., up to 0.312 in. where heavier-walled pipe is necessary.

Stupp Corp., Baton Rouge, supplied the 24 and 22-in. OD pipe. First shipment was by barge landing near the right-of-way in the Tepetitan River starting in February 1998. All pipe for the first 57.1 miles at the south end of the line was delivered to this point, says the consortium.

To match the construction schedule, the balance of the 24-in. and 22-in. pipe was delivered to the new port facilities in Seybaplaya, state of Campeche, starting in August 1998 and finishing by February 1999.

The 16-in. pipe from Procarsa S.A. de C.V., Monterrey, was delivered by road from Monterrey to sites along the stretch between Merida and Valladolid between June and September 1998.

The Procarsa pipe mill implemented several technological improvements to its quality control and assurance processes, says Energía Mayakán, to meet the rigorous requirements of TransCanada's pipe specification that exceeded the basic requirements of API and Mexican standards.

The pipe was coated by Procarsa with fusion bonded epoxy (FBE) coating for corrosion resistance. Some 18.6 miles of this pipe were coated with a high-temperature-resistant epoxy by Compression Coat, New Iberia, La., to tolerate the higher temperatures of up to 80° C. (176° F.) downstream of the first compressor station (Fig. 2).

Some additional pipe used for road bores and directional drills received a coating of urethane epoxy over the FBE for mechanical protection during installation.

Additional lengths of pipe received a thick concrete coating to control buoyancy in swampy areas and river crossings (Fig. 3). Bredero Price at its Coatzacoalcos, Vera Cruz, plant and Compression Coat at its New Iberia, La., plant carried out this coating process with the extrusion process.

Turbocompressor packages for the compressor station in the first phase of the project were acquired from Solar Turbines, San Diego, and were delivered to site in November 1998.

Three 3.2-MW Centaur units are being installed at the station, two to operate and one unit as standby, for the first phase of the project. There is provision for a fourth unit to be installed at this location for future load increase in later phases.

Three Centaur 50 gas turbines are required. Each unit has a power rating of 4.24 MW ISO or 3.26 MW at site conditions. Future units will be of a similar power rating.

The ultimate design will include two additional stations. One station (Station 2) will be located at approximately Mile Point 157.5 where the pipe diameter changes from 24 in. to 22 in.

The other will be located near Merida at approximately MP 315 where the pipeline diameter changes from 22 in. to 16 in.

Station 2 will consist of three units; Station 3, two units.

Route caution

Because sections of the pipeline cross archaeologically rich lands, particularly in the state of Yucatan, the route follows existing pipelines, railways, and highways to reduce environmental or archaeological impact.

Moreover, says the consortium, it is devoting considerable resources to preserving the abundant historical and archaeological sites.

CFE initiated the environmental impact statement process with the National Institute of Ecology (INE) in 1996 to identify mitigation measures and to develop environmental guidelines for the pipeline project covering such issues as wetlands protection, noise pollution, and protection of fish and wildlife.

These extensive guidelines form the basis of a detailed environmental management plan to be utilized by Energía Mayakán during project construction and operation.

In Campeche, the project began with the clearing and grading of approximately 62 miles of extremely difficult terrain, says the consortium. The area is very hilly with dense vegetation and rocky soil (Fig. 4). The company says work was slow going and required its representatives to work closely with numerous small groups of landowners along the route.

On another front, the project began working on the main line spread, west of Valladolid. The world's largest rock ditchers, each weighing 240 tons and taking 2 weeks to move and assemble, were moved to this section.

Much of Yucatan in this area is limestone with many underground water-filled caverns called "cenotes," says Energía Mayakán; the ditchers have had to tread lightly to prevent falling into a near-surface cenote. Extra care is taken in surveying and grading this stretch of the pipeline, says the consortium.

Horizontal drilling

Energía Mayakán's high-risk horizontal drilling involved pushing drill pipe beneath some of the region's widest rivers.

The drilling program, in the states of Tabasco and Campeche, began work in Sept. 12, 1998, on the Tepititan River. The last of five river crossings was completed 45 days later, on Oct. 26.

Horizontal directional drilling, says the company, is costly and risky. Rocks, sand, and inconsistent soil are just a few elements that could have brought about the project's failure.

Resorting to more-traditional drilling methods would have meant possible damage to the environment, says the company, not to mention the project's tight schedule.

Bechtel's subcontractor, Ozzie Directional Drilling Co., drilled beneath the five rivers:

• The Usumacinta, which spanned 606 m (nearly 2,000 ft) and took 18 days to complete
• The Tepititan, 407 m and 5 days
• The Chompoton, 383 m and 7 days
• The Chumpan, 331 m and 6 days
• The Candelaria, 379 m and 5 days.

Energía Mayakàn says that the pipe was coated with protective urethane over its FBE coating, assembled on-site, and hydrotested before being pulled into place.

The drilling mud was a water-based bentonite, a colloidal clay that swells when wet, and was safely disbursed in nearby farmlands once the rains had subsided.

The company says pipe was installed an average of 10 m beneath the low point of each river. Average time spent per crossing was slightly more than 8 days.

For these five major rivers, there was no in-river construction, thus avoiding environmental impact.

Land rights

To obtain routing, company personnel began land-rights acquisition and negotiation as early in the process as possible.

Most land rights for the project were obtained through a real-estate trust jointly managed by CFE and Energía Mayakán. CFE initially funded the trust before the project contract was awarded to Energía Mayakán.

As a condition of the bid, the project was required subsequently to fund the trust so that all of the costs for land rights would be accounted for as a project cost.

The pipeline has a 15-m wide permanent right-of-way and an additional 15 m of temporary working room, except in environmentally sensitive areas where the width was minimized.

In total, over the entire route, there were approximately 850 separate properties, 34 municipalities, and four states through which to pass.

Over most of its length, the route generally follows the path of existing CFE power lines, an existing Pemex pipeline, telecommunications cables, and major highways.

Given this, landowners and communities along the route are accustomed to dealing with project construction through their areas. Energía Mayakán says this has had both positive and negative impacts on the progress and degree of difficulty of dealing with routing issues as the project has progressed.

On the one hand, being accustomed to such projects, landowners and communities know what to expect and most have dealt with land rights through their properties in the past.

If there have been any difficulties in dealing with previous utilities or constructors, however, they may be reluctant to accept a new project. It has been critical in these circumstances to ensure that commitments of the project are clear, consistent, and above all, honored.

Although more than 95% of the permanent easements had been negotiated by early 1998 before clearing and construction activities began, there was still a significant amount of work to finalize agreements on the remaining 5% of properties and to negotiate the temporary working room.

By July of 1998, access to most of the right-of-way had been achieved, and final accesses were all completed by the end of September.

Archaeological concerns

One of the tasks related to use of the land rights as the project clearing and construction phase began was to obtain clearance from the Instituto Nacional de Antropolog!a y Historia (INAH) archaeological division.

Because detailed archaeological investigation of the route could not be conducted until the final route had been confirmed and land-access rights obtained, investigation crews from INAH were under pressure to carry out their work quickly to stay ahead of clearing crews preparing the right-of-way for construction.

Preliminary assessment had suggested that a few archaeological vestiges along the route might interfere with it or require its rerouting.

The detailed investigation discovered, however, considerably more sites that warranted more-detailed investigation and significant coordination between CFE, the consortium, Bechtel, and INAH.

By the time the major clearing crews got into full production, decisions had been made with INAH's blessing either to proceed or make minor reroutes of the line at virtually all locations that had been thought to have potential archaeological significance.

In total, there were approximately 35 route changes on the project to avoid sites that were designated to be of archeological significance.

This added to the work load of the land agents negotiating all of the appropriate landowner approvals on the affected properties and survey and engineering crews laying out the final route.

Lessons

Energía Mayakán, in summing its experience thus far, says that its experiences have been very positive in the new environment of energy project development in Mexico.

With little experience, CFE has been able to put in place a contract that sees foreign private investors successfully investing in the first major pipeline project of this type in Mexico, with strong support from the international financial community.

With the need to commence many long-lead activities, particularly environmental licensing and land-rights acquisition, finalizing and executing the CFE contract was urgent. This was in combination with closing of financing for the project.

Neither of these processes has worked out perfectly for the project parties, says the company, and all would choose to see some changes in their administration if doing them again.

Nevertheless, the benefits of the basic features of these steps have outweighed some of the administrative issues that have arisen and any lessons learned from such issues relate to details rather than fundamental approach.

Regarding land-rights acquisition and particularly routing, two key areas that need to be closely attended to early in the process are early coordination with archaeological authorities and collaboration between pipeline designers and closely paralleling power lines.

In future projects INAH should be consulted during the initial route-selection process for pipelines in Mexico. This should be done to ensure that the preliminary route is unlikely to interfere with any known archaeological features and secondly to ensure that a process of detailed route inspection, clearance, and change management is developed before the right-of-way clearing begins.

It may appear ironic, says the consortium, to identify a need for closer collaboration between power-line utilities and pipeline designers and routing experts, given that the power lines along the route of this pipeline belong to CFE.

But, because the initial route was selected without input from Energía Mayakàn and its construction contractor, issues inevitably arose that pipeline experts say were not addressed in selecting a route that closely paralleled power lines.

One key difference between power lines and pipelines is that because power lines do not follow the topography of the ground surface meter by meter, constructability issues that are important for pipelines may not be addressed if a power line route is followed exactly.

In this case, while minor route deviations have been permitted to accommodate pipeline construction, it has been preferable in many cases to use the originally selected route because land-rights acquisition had proceeded.

The other important factor to consider when planning to build pipelines and power lines close together over long distances is electrical interference.

This issue can manifest itself in two problems.

One is induced currents in the pipeline which can cause safety hazards to people making contact with the facility.

The second relates to ground fault and corrosion-protection systems.

Close collaboration between operators and designers of power transmission and pipeline systems is required to avoid design assumptions that may leave one of the systems inadequately protected.

All parties involved in the project have also learned how important it is to address issues with communities throughout the length of the route.

One is always aware of the necessity to ensure that a project does not have a negative effect on its neighboring communities. But the consortium has found in this project that not having a negative impact may be insufficient and that local communities expect benefits.

This has been particularly apparent through some of the poorer regions of the pipeline route. CFE and Energía Mayakán have worked closely together using resources of their real estate trust set aside for that purpose to ensure that communities see some immediate benefits outside of the principal focus of the project.

The year ahead

The company says the outlook for completion of construction and start-up of gas delivery to CFE's plants is bright.

Pipeline construction now has access to all required land, and terrain conditions are straightforward throughout the route. Trenching will remain one of the critical activities. But with some of the best equipment in the world working on the project, says the consortium, this will be primarily a matter of optimizing resource use.

Compressor station construction is only just now getting under way.

Copyright 1999 Oil & Gas Journal. All Rights Reserved.