By the OGJ Online Staff
HOUSTON, Oct. 11 -- Reef Marketing LLC, a subsidiary of Tidelands Oil & Gas Corp., Corpus Christi, Tex., Thursday signed an initial 10-year agreement to sell natural gas to Compania Nacional de Gas SA de CV (Conagas), a distribution company that serves the Piedras Negras, Coahuila, Mexico area.
Tidelands will provide Conagas with the gas it needs to meet the energy demands of the Piedras Negras region, which is growing at annual rate of 24%, officials said. Tidelands did not say how much gas was involved.
Tidelands and third parties will provide the gas. The agreement calls for Tidelands to process gas at its Rio Bravo Processing Plant and transport it via its Sonora Pipeline network to the proposed Eagle Pass/Piedras Negras International Pipeline Crossing. The gas will be moved through a 12-in. diameter pipeline, to be built underneath the Rio Grande River.
The Texas Railroad Commission recently granted operating and construction permits to Reef International LLC, another Tidelands subsidiary, to begin construction of that international pipeline crossing on the US side of the Mexican border. The proposed line would transport natural gas, propane, and butane at the same crossing via a three-line network (OGJ Online, Oct. 9, 2001).
The international crossing is in its final permitting phase. It should be operational by early 2002.
Company officials did not reveal a price for the 10-year Conagas agreement, although they said it should significantly affect Tidelands' revenues and should be reflected in per-share earnings by the second quarter of 2002.