Mexico, Guatemala push for Central American gas pipeline

The proposed sale of Mexican natural gas to Central America via a pipeline through neighboring Guatemala is still being pushed by officials from both countries. The pipeline project, which would provide Guatemala with its first commercial supply of clean-burning gas, has been inching toward reality for years.


The proposed sale of Mexican natural gas into Central America via a pipeline through neighboring Guatemala is still being pushed by officials from both countries.

The pipeline project, which would provide Guatemala with its first commercial supply of clean-burning gas, has been inching toward reality for years.

But with investment interest still low, a proposal to integrate the bigger Central American region into the plan offers the best prospects for the plan, officials said.

Mexico will host talks next month with Central American officials in hopes of stimulating interest in extending the proposed pipeline south beyond Guatemala. Mexican gas supplies would make the poverty-stricken Central American countries less dependent on oil imports to fuel electric generation.

Petroleos Mexicanos, Mexico's national oil company, does not produce enough gas to supply that country's own growing demand. But new supplies of Mexican gas don't necessarily have to come from Pemex, said Guatemalan officials.

One possible alternative is for Central American countries to buy US gas through a swap-contract with Mexico. Under that arrangement, US companies would supply gas to the industrial districts in northern Mexico, freeing up gas supplies from fields in southern Mexico for shipment to Central American buyers.

Guatemalan officials say they're also open to importation of liquefied natural gas or an even more ambitious plan of building a pipeline from Colombia or Venezuela to carry gas supplies to Central America.

Last November, Guatemalan officials talked about plans to pipe Mexican gas into that country with 45 interested companies from Argentina, Canada, Japan, Mexico, Russia, the United States, and Central America. The next month, they signed an agreement with Mexico establishing the legal framework for building the pipeline.

Guatemala's energy minister said at the time that he expected bids for the project to be accepted and assessed and a construction contract awarded midway through this year.

But potential investors were slow to materialize. Meanwhile, the projected cost of the proposed pipeline has increased to $600 million from $400 million nearly a year ago.

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