Honduras joins Mexico-Guatemala gas pipeline project

Honduran President Juan Orlando Hernández (pictured) said his country will join the planned 600km Mexico-Guatemala natural gas pipeline project.

He added he will sign an official agreement during a trilateral meeting this month confirming the involvement of Honduras in the construction of the duct.

The pipeline will benefit the two Central American nations by reducing energy and fuel costs, allowing industry to economize by converting to natural gas, Hernández said at a joint press conference on Wednesday with Guatemalan President Otto Pérez Molina.

"Energy prices will be lower, benefiting the Honduran people," Hernández said.

The project, which is expected to take four years to complete, includes an associated 300MW natural gas-fired power station in Guatemala.

Investment in the pipeline, which will run from the Mexican Pacific coast port of Salina Cruz to Escuintla in southern Guatemala, has been estimated at around US$700mn, based on the original Mexico-Guatemala proposal.

After a meeting in February between Mexico's hydrocarbons undersecretary María de Lourdes Melgar Palacios and Guatemalan energy and mines minister Erick Archila Dehesa, Mexico's energy ministry Sener announced that an investment summit would be held this month.

NATURAL GAS SUPPLY

In October, Hernández met with US companies National Oilwell Varco (NOV) and Jorbet, which expressed interest in supplying natural gas to Central America.

"A good part of the solution to the problem that [state power company] Enee faces is lowering power generation costs," he said at the time.

NOV executive Óscar García Shelly said studies would determine the feasibility of installing an LNG terminal, as well as a pipeline from Mexico.

Installed capacity in Honduras in October was 979MW thermopwer, 614MW hydropower, 124MW biomass and 102MW wind.

BNamericas will host its 3rd Mexico Oil & Gas Summit on April 15-16, and its 3rd Mexico Electric Power Summit on May 13-14, both in Mexico City.