Electric Power - Mexico

Fermaca subsidiary wins US$310mn pipeline contract

Fermaca subsidiary wins US$310mn pipeline contract

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Mexico's state power company CFE has awarded the contract for EPC and operation of the 385km Chihuahua Corridor gas pipeline that will transport gas from the US for power generation in Chihuahua, Durango and Coahuila states, according to a record from the event.

Tarahumara Pipeline, a subsidiary of local gas transport firm Fermaca, presented the winning bid of US$310mn.

A consortium of Spanish firm Elecnor and France's EDF Trading presented a bid of US$454mn while Gasoductos de el Encino - a consortium of US energy company Sempra (NYSE: SRE) and state oil company Pemex's gas and petrochemical subsidiary PGPB - bid USS$501mn.

The pipeline will move up to 850Mf3/d (24Mm3/d) of natural gas from Ciudad Juárez to El Encino, both of which are in Chihuahua state. In El Encino, the pipeline will connect with the Chihuahua-Torreón pipeline that forms part of Mexico's national gas system (SNG).

The pipeline aims to cover the current gas deficit in northern Mexico, grant flexibility to the SNG, and provide gas to new power plants set to come online in the coming years, CFE has said previously.

Four gas power plants are slated to come online in the area from 2013-20: Norte II (459MW), Norte III (954MW), Norte IV (918MW) and Norte V (944MW).

CFE and Tarahumara will sign the contract for the pipeline on December 21. Under the contract's terms, Tarahumara will provide transport services over a 25-year period.

Construction works are scheduled to run through mid-2013.

OTHER GAS PIPELINE PROJECTS

Last month, Elecnor won the contract to build and operate for 25 years the 160km pipeline that will run from Tlaxcala state to Morelos state with its US$175mn bid.

The pipeline will initially move gas from an interconnection with the Esperanza-Venta de Carpio pipeline in Tlaxcala to Morelos. A second phase would involve extending the pipeline from the same interconnection to the Cempoala-Santa Ana pipeline in Tlaxcala. First phase commercial operations are scheduled to begin in October 2012, with second phase operations beginning June the following year.

Meanwhile, 30 firms had purchased bidding rules for the EPC of its 630Mf3/d Tamazunchale-El Sauz gas pipeline as of the sixth project meeting in mid-November, according to the meeting's record.

The roughly 200km pipeline project in central Mexico will connect the SNG's Palmillas-Querétaro pipeline with the private Naranjos-Tamazunchale pipeline. It will improve redundancy and provide gas to new plants scheduled to come online through 2024.

CFE will hold the seventh project meeting on December 20, and plans to receive bids on January 10. The state firm had slated commercial operations to begin in December 2013 at the time of the tender's launch.

The contract will have a 25-year term. The winning bidder must leave the pipeline in condition to be connected to the future generation plant in Tula, Hidalgo state.

The tender number is LPI-SCPIF-003/11.