Proposed pipeline to serve Mexican power needs

Sempra Energy International, a subsidiary of Sempra Energy, San Diego; Pacific Gas & Electric Corp.'s National Energy Group, San Francisco; and Mexico's Proxima Gas SA de CV jointly reported a plan to build a $230 million, 212-mile natural gas pipeline to serve the high-growth northern Mexico market.


Sempra Energy International, a subsidiary of Sempra Energy, San Diego, Calif.; Pacific Gas & Electric Corp.'s National Energy Group, San Francisco; and Mexico' Proxima Gas SA de CV jointly reported a plant to build a $230 million, 212-mile natural gas pipeline to serve the high-growth northern Mexico market.

The proposed Northern Baja pipeline would begin at an interconnection with the El Paso Natural Gas Co. system near Ehrenberg, Ariz., cross southeastern California and northern Baja California, Mexico, and terminate at an interconnect with the Rosarito Pipeline south of Tijuana.

The three companies have signed an interim agreement to jointly develop, design, construct, and operate the 400 MMcfd pipeline. The initial design calls for a 30-in. pipeline and one compressor station in Arizona.

Subject to various regulatory approvals, the proposed pipeline could be in service by January 2003, the companies reported. The consortium will hold an open season starting in mid-June to solicit bids for capacity on the pipeline.

PG&E Corp. will build and operate the 77-mile US segment of the plant. A joint venture between Sempra and Proxima will be responsible for the Mexican portion, said Michael Clark, Sempra spokesman.

The project will supply gas to northern Mexico, where demand among power plants and energy-intensive industries in Baja California is growing rapidly, according to the companies.

"We and Proxima Gas believe this is a critical project in integrating the energy markets of California and northern Mexico," says Donald Felsinger, Sempra Energy group president and Sempra Energy International chairman. He says the project expands Sempra's ability to deliver gas to Mexico and capitalize on the demand for a cleaner-burning fuel in the region.

Currently, Baja California manufacturing plants and residents rely on propane and fuel oil for boilers and cooking. Under a plan proposed by the Mexican Federal Electricity Commission (CFE), the existing Presidente Juarez power plant in Rosarito, Mexico, will be converted to gas from oil. The CFE also has solicited offers from independent developers to build 500 Mw of new natural gas-fired electric generation in Baja California.

The US segment will be regulated by the Federal Energy Regulatory Commission and the Mexican segment by the Mexican Energy Regulatory Commission (CRE). Sempra Energy International filed for a natural gas transportation permit with the CRE in March.

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