Mexico Expands LNG Pipeline to Yucatan

June 20, 2013 09:00 AM

pipeline2Recent industry estimates calculate the cost of liquefication and transport of LNG at $9.15 per MMBtu. The process of freezing natural gas to -260°F and then loading onto cryogenic transport vessels almost creates a cost prohibitive structure for exports of LNG via ocean trade. But as the United States sets itself to become the world's leading supplier of LNG, world consumption continues to increase.

The price for LNG in Japan is down this year over June last year from $18 to this summer's $15.25. LNG produced in Mexico is less expensive, but still carries a $10/MMBtu price tag. Demand is up 9.9% year-over in China, 12.6% in Norway and 11% in Saudi Arabia. Meanwhile, U.S. LNG production is up 4.7%. To combat high import prices, Energia Mayakan, a subsidiary of GDF SUEZ Mexico and GE Energy Financial Services, is extending its 700-km-long, 24-to-16-inch-diameter Mayakan pipeline that starts in Macuspana, Tabasco, and runs through the states of Chiapas, Campeche and ends in Valladolid, Yucatan.Yucatan, Mexico

"This investment helps Mexico strengthen its natural gas infrastructure in the kind of critical, contracted, long-lived midstream assets we know well," said Alex Urquhart, president and CEO of GE Energy Financial Services. "In addition, this transaction illustrates our commitment to improving the assets in our portfolio, investing in projects during their development, and repeating business with valued customers such as Pemex and co-investors such as GDF SUEZ."

The extension will run 75 kilometers from the Nuevo Pemex Gas Processing Plant -- owned by Pemex Gas y Petroquimica Basica (PGPB) in Nuevo Pemex, Tabasco -- to connect with the existing Mayakan pipeline in Macuspana, Tabasco. Mexico's electric utility CFE has contracted with PGPB to use 300 MMFCD (million cubic feet per day) of gas through this new 30-inch-diameter pipeline to switch power plants in the Yucatan Peninsula from burning diesel and fuel oil to cleaner and less expensive natural gas.

Photo credits: PRNewsFoto/GDF SUEZ






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