Techint starts construction of 1bcf/d gas line

Thursday, October 24, 2002

Argentina's Techint has been awarded a US$145.5mn EPC contract to build the San Fernando natural gas pipeline, according to Tamara Goudinoff, regulation head at pipeline owner Gasoductos de Tamaulipas (GDT).

Energy regulator CRE gave its approval for the 114km, 36-inch diameter natural gas pipeline in September, and Techint is starting construction now, Goudinoff said. The pipeline is scheduled to start operations by September 2003.

Pipeline construction accounts for US$112mn of the Techint contract, with the remaining US$33.5mn for the associated compression system.

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Total investment in the project is US$238mn; the remaining US$92.5mn will be spent on associated expenses such as appropriation of land and interest payments during the construction period.

Gasoductos de Tamaulipas is wholly owned by Gasoductos de Chihuahua, which is a 50/50 joint venture of US energy company El Paso and the Pemex Gas y Petroquimica Basica (PGPB) subsidiary of Mexico's state oil company Pemex.

GDT has signed an operations and maintenance contract for the pipeline with PGPB.

The pipeline will transport 1 billion cubic feet/day (bcf/d) from the El Caracol compression station near Reynosa in Tamaulipas state due south to the Los Indios compression station near San Fernando. Both stations are connected to the SNG national pipeline grid.

The pipeline will have reversible flow, initially importing US gas to Mexico and later taking gas from the Burgos basin to a cryogenic plant planned for a site adjacent to the El Caracol station.

Pemex owns all the pipeline capacity and has already contracted 360mcf/d capacity to a number of clients, Goudinoff said. The CRE obliged GDT to hold an open season for the remaining 640mcf/d capacity, and companies wanting to contract capacity should show their interest between November 4 2002 and November 3 2003.