CFE pipeline plans highlight lack of Pemex transport interest - lawyer

Mexico's state oil company Pemex is not interested in natural gas transport investment, as evidenced by state power company CFE's plans to launch tenders for three long pipelines, Benjamin Torres-Barron, a partner at Baker & McKenzie in Mexico, told BNamericas. The first pipeline will stretch 385km from the US border into Chihuahua state to connect with the natural gas system (SNG) operated by Pemex's gas subsidiary PGPB. Another 200km pipeline in central Mexico will connect the SNG with the private Naranjos-Tamazunchale pipeline, while a third project will run 150km from its SNG interconnection point. All three pipelines are intended, among other things, to provide gas to combined cycle power plants due to come online in coming years under the CFE's 2010-24 works and investment program (POISE). "Pemex no longer wants to invest in transport pipelines. Pemex has even tried to sell pipelines since years ago," said Torres-Barron. "If Pemex wanted to do the pipelines, it would tender them. It is CFE that is going to tender them, but why doesn't Pemex do it? What that says to me is that Pemex no longer wants to develop new pipelines." Worth noting, however, is that last month an executive from US energy company Sempra (NYSE: SRE) said Pemex would not proceed with plans to divest its 50% interest in pipeline and gas infrastructure assets in northern Mexico as originally intended. In the second quarter, US oil firm El Paso (NYSE: EP) completed the sale of the assets to Sempra Pipelines & Storage in a deal worth US$300mn. Sempra had planned on buying out Pemex's interest in the assets, but the state firm no longer plans to sell. The JV owns and operates the 36km Samalayuca gas pipeline and Gloria a Dios compressor station in Chihuahua that provide US gas to various power plants; the 113km San Fernando gas pipeline in Tamaulipas state; and the 183km pipeline that transports propane from the Burgos production area to a facility near the city Monterrey. The Sempra executive said at the time he expected Pemex to carry out additional projects associated with the assets.