Durango official says El Encino-La Laguna pipeline conflict resolved

Friday, March 17, 2017

A dispute over the planned route of part of the El Encino-La Laguna natural gas pipeline in Mexico has been settled, an official said.

Landowners in the town of Lerdo in the northern state of Durango had opposed the duct passing through their property.

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María Luisa González Achem, the mayor of Lerdo, was quoted by Milenio newspaper as saying Friday that the conflict had been resolved and that construction could continue. No details of the deal were reported.

She added that the pipeline will help attract investment.

A local unit of Canadian firm Fermaca won a contract to build the US$530mn, 423km pipeline in December 2014. It will transport up to 1.5Bf3/d (42.5Mm3/d) of natural gas from Waha, Texas, to state utility CFE's power stations in the states of Chihuahua, Coahuila and Durango, as well as in the central and western regions of the country. It will also connect to the Ojinaga-El Encino pipeline.

The El Encino-La Laguna duct was originally scheduled to become operational this month. No new date for completion has been given.

The pipeline will also connect to the US$373mn, 600km La Laguna-Aguascalientes pipeline, awarded to Fermaca last March.

Fermaca is also building the Villa de Reyes-Guadalajara natural gas pipeline, for which it procured financing from international lenders last November. It was awarded the contract last March.

The pipeline projects are part of Mexico's strategy to increase natural gas supply to the country's power stations and factories.

Mexico issued a land use decree for the oil and gas sector last June, outlining contracts to be signed and compensation to be awarded for land occupation and use for hydrocarbons extraction or pipeline construction, part of the country's energy reform.