Oneok Partners LP entered into a 50-50 joint venture with a subsidiary of Fermaca Infrastructure BV of Mexico City to construct a natural gas pipeline from the Permian basin in West Texas to Mexico.
The Roadrunner Gas Transmission pipeline project, subject to government approvals, would extend from Oneok Partners' WesTex Transmission gas pipeline system at Coyanosa, Tex., west to a new connection near San Elizario, Tex.
Roadrunner will connect with Fermaca's Tarahumara Gas Pipeline. Oneok Partners will manage the construction and operate the pipeline, estimated to cost $450-500 million.
Terry K. Spencer, president and chief executive officer of Oneok Partners, said the project, to be constructed in phases, includes 200 miles of new, 30-in pipeline currently designed to transport up to 640 MMcf/d of gas, with up to 570 MMcf/d to be transported to Mexico.
Mexico's national electric utility signed initial design capacity agreement with a Fermaca subsidiary. All transportation agreements will be firm (take-or-pay) arrangements for 25 years. Roadrunner was fully subscribed in its initial design through an open season last year. Additional capacity could become available through future expansions.
"We see Roadrunner as a gateway asset that will connect Mexico's rapidly growing natural gas markets with US producers in the developing Permian," Spencer said. "The pipeline will connect with Oneok Partners' extensive existing natural gas pipeline and storage infrastructure in Texas and create a platform for future cross-border development opportunities."
The first phase of the pipeline project for 170 MMcf/d of available capacity was expected to be completed by early 2016. The second phase, which will increase the pipeline's available capacity to 570 MMcf/d, was expected to be completed in early 2017. The third phase was expected to be completed in 2019 and would increase available capacity to 640 MMcf/d.
Oneok WesTex Transmission, an intrastate pipeline system within Texas, involves 2,227 miles of pipeline."
