Raúl Arechiga
Director General
Constructora Arechiga
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View from the Top

Modernizing Natural Gas Infrastructure

Tue, 01/21/2020 - 18:11

Q: How would you describe your experience regarding natural gas infrastructure in Mexico?

A: Constructora Arechiga started its infrastructure business in 1985 and shortly after, the company was awarded contracts with PEMEX to develop natural gas infrastructure. The most important project was the expansion and automation of the Muspac Separation Battery, which was a large project that required an international EPC contracting process. We also worked on the construction of the project to replace the general sour gas wellhead and the rectifier system at CPG Cactus. This project included the replacement of separators, rectifiers, measuring instruments and all the components for the gas burners. The project had an estimated budget of US$40 million at the time of completion. This project is of great importance for PEMEX, playing an active role in receiving natural gas produced in southeastern Mexico.

Q: To what extent does PEMEX prioritize the development of its natural gas fields and infrastructure?

A: Ciudad PEMEX is one of the most important natural gas producing areas in Mexico. This includes the Comalcalco fields, in Tabasco, and Agua Dulce, in Veracruz. While it continues to be prominent within strategic areas of PEMEX, development related to natural gas exploration and new reserves, in particular, has halted in recent years. But the NOC is now starting to react to these activities, due in part to the federal government’s policy to jump-start the oil and gas sector throughout the country, particularly in Tabasco and the southeastern region of Mexico. This includes the reactivation of existing petrochemical refineries and facilities in the country, as well as the construction of the new refinery in Dos Bocas, Tabasco. Overall, this will generate a great amount of industrial development, in which natural gas plays an important role. One has to remember that the 48-inch diameter pipeline Cactus-Reynosa, built four decades ago, was originally designed to transport natural gas produced in southeastern region of Mexico to the US. This project was not completely finalized due to historical and economic reasons. However, the production of natural gas has played a fundamental role in the economic and industrial development of the northern states of Tamaulipas and Nuevo Leon. Particularly in Monterrey, as well as the Mayakan gas pipeline traveling from Ciudad PEMEX in Tabasco to Valladolid, Yucatan. Examples such as these are proof of the enormous role that natural gas plays in the country’s development, especially for generating electricity.

Q: What obstacles stop the development and modernization of natural gas infrastructure?

A: Development in this sector as well as in the construction of oil and gas infrastructure in the land-based area of the southeast region of the country has been suspended, especially in the last 10 years. This is one of the biggest obstacles to development, optimization and modernization of the oil and gas infrastructure in Mexico. This infrastructure requires a great amount of repair and maintenance work. This has created significant operational risks. However, much work has been done recently in terms of inspection, maintenance and repairs to the infrastructure. The southeastern Mexican states contain a high density of oil and gas. If an accident occurs, such as a leak, a fire or an explosion, it could have dire consequences, since much of the infrastructure is near or within densely populated areas and the loss of human life could be extremely high. It would not be a mere local incident; it would have national repercussions. In addition, there is a significant lack of information available on the exact location of many of the pipelines. Pipelines are operating in Veracruz, Tabasco and Campeche and I am convinced PEMEX has not mapped them entirely. The NOC knows where these pipelines start and where some end, but in some cases, it is not aware of their exact trajectory. Some of these pipes have gone 30 years without any preventive maintenance, and this represents an enormous risk. This is why maintenance contracts and infrastructure investment must be restarted, while continuing to develop current contracts. We have joined the Tabasco Energy Cluster in an effort to secure contracts with new operators in the industry that play an important role in land-based development.

 

Constructora Arechiga started its activities in 1985, although its founding members had been working with PEMEX since the 1960s. The company focuses on electromechanical construction and engineering for oil and gas infrastructure.