Sempra International unit to construct natural gas pipeline network in Northwestern Mexico

Tuesday, October 23, 2012

Sempra International today announced that its Mexican business unit Sempra Mexico has been awarded two contracts by Comision Federal de Electricidad (CFE), Mexico's state-owned electric utility, to construct, own and operate an approximately 500-mile (820-kilometers), $1 billion pipeline network connecting the Northwestern states of Sonora and Sinaloa.

After a competitive and transparent international public bidding process, Sempra Mexico's offers were selected to develop the new pipeline network. The network will be comprised of two segments that will interconnect to the U.S. interstate pipeline system in Arizona and will provide natural gas to new and existing CFE power plants that currently use fuel oil. The capacity for each segment is fully contracted by CFE under two 25-year firm capacity contracts denominated in U.S. dollars.

"We are pleased to have been awarded these projects, which will strengthen the gas transportation system in northern Mexico," said George Liparidis, president and CEO of Sempra International. "These projects represent an extension of our core business in Mexico and an important part of our plan to grow our international business."

The first segment, a 36-inch, 310-miles (500-kilometer) pipeline will run from Sasabe, south of Tucson, Ariz., to Guaymas, Sonora, and will have the capacity of 770 million cubic feet (Mcf) of natural gas per day. The new pipeline is expected to begin operations late 2014.

The second segment from Guaymas to El Oro, Sinaloa, is a 30-inch, 200-mile (320-kilometer) pipeline with a capacity of 510 Mcf of natural gas per day. The pipeline is planned to begin operations in the third quarter of 2016.

"This new pipeline network will provide reliable access to clean natural gas to CFE's plants in Sonora and Sinaloa," said Carlos Ruiz, president and CEO of Sempra Mexico. "We have a long and successful history of safe, efficient and reliable operations in Mexico and we appreciate the confidence that CFE has placed in us. We look forward to creating new jobs in these communities and improving the local economy for years to come."

This article is for information and discussion purposes only and does not form a recommendation to invest or otherwise. The value of an investment may fall. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment adviser. More

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