Los Ramones Natural Gas Pipeline

Wed, 01/22/2014 - 16:03

In recent years, Mexico’s natural gas production has dropped while domestic demand for natural gas grew at an annual rate of 4% per year over the past five years, resulting in alarming gas shortages and 22 critical alerts being issued in 2012 and another 13 in 2013. Power failures suffered by industrial companies as a result of gas shortages have already taken their toll on the Mexican economy, causing losses rising to billions of dollars. Natural gas imports from the US already cover almost 30% of national consumption, and given the Henry Hub natural gas price it is more affordable import than to produce this hydrocarbon locally. In 2013, Mexico imported 1.29bcf/d, a figure that could double by 2016 as new pipelines come into operation.

A major pipeline development, Los Ramones, was ordered by former President Felipe Calderón in 2011. The project was conceived with the intention of addressing the nation’s natural gas supply over the next 15 years. The pipeline is planned to satisfy 20% of Mexico’s demand and alleviate natural gas shortages. According to PEMEX estimates, the pipeline will receive an investment of US$3 billion and will have a capacity of 2.1bcf/d. The contracts for Los Ramones should have been awarded in October 2012, but in January 2013, PEMEX decided to split the project into two. The first consists of a 114km section, linking Agua Dulce, Texas, with the Los Ramones municipality in Nuevo Leon. TAG Pipelines, a subsidiary of PEMEX Gas and Basic Petrochemicals, was in charge of building the first phase of the duct. In order to reduce execution times, TAG Pipelines joined forces with Sempra Energy in a 50- 50 joint venture. Tubacero was entrusted with supplying the 40-inch diameter pipes needed for the project, while Gasoductos de Chihuahua was awarded to contract to transport hydrocarbons. The first phase is expected to begin operations during the final months of 2014.

The second section of the project consists of a 740km pipeline that will pass through Tamaulipas, San Luis Potosi, and Queretaro once it reaches its conclusion in 2015. It will supply gas to the country’s central region, an important industrial hub. Contenders Infraestructura Energética Nova and Transportadora de Gas Natural de la Huasteca abandoned the tender for this second phase, leaving a consortium consisting of Enagás Internacional and GDF Suez as the sole competitor. Construction works began on March 2014. The pipeline will begin in the border city of Camargo, Tamaulipas, leading to Apaseo el Alto, Guanajuato. It will have an interconnection station in Los Ramones, the reception point, three compression stations distributed in Tamaulipas, Nuevo Leon, and San Luis Potosi, and four gauging and regulation stations in delivery points. There are talks about a possible third phase which will wind its way from San Luis Potosi to Aguascalientes, and would take the form a 118km duct with 28-inch diameter pipes.