NET Midstream Gets FERC Approval for NET Mexico Pipeline to Export Eagle Ford Gas

NET Midstream - Mexico Pipeline Map

NET Midstream has received FERC approval for border crossing facilities that will allow the NET Mexico Pipeline to export Eagle Ford natural gas to Mexico. At capacity, the pipeline could double U.S. natural gas exports to Mexico.

The Net Mexico pipeline is a 42-inch, 124 mile pipeline from Nueces County to Starr County in South Texas.

The pipeline is backed by a 2.1 Bcfd transportation contract with MGI Supply ltd (PEMEX Subsidiary).

Read - Net Midstream Plans Eagle Ford Pipeline from Mexico to Nueces County

“We were pleased to receive this timely authorization from FERC last week. Receipt of the Presidential Permit was an important regulatory milestone for NET Mexico.” said Joe Gutierrez, Co-President of NET. “Development and financing of the pipeline is on schedule, with mainline construction beginning in the first quarter of 2014, and mechanical completion in October.”

Much of the pipeline will be 42 inch pipe, but approval has been granted for a 48-inch pipeline into Mexico.

Read the full press release at netmidstream.com

Net Midstream Plans Eagle Ford Pipeline To Mexico from Nueces County

Net Mexico Pipeline Map

Net Midstream announced plans for a 42-inch, 124 mile pipeline from Nueces County to Starr County in South Texas. The pipeline is backed by a 2.1 Bcfd transportation contract with MGI Supply ltd (PEMEX Subsidiary). If the pipeline runs at capacity, it will more than double current exports to Mexico.

The natural gas will be transported from the Agua Dulce hub in Nueces County to a point near Rio Grande City in Starr County.

“If the Net Mexico Pipeline moves 2.1 Bcfd, it will more than double current natural gas exports to Mexico. ”

In the past two years, US natural gas flows into Mexico have increased to approximately 2 Bcf/d. That's up from less than 1 Bcf/d at the beginning of 2010. Demand for natural gas in Mexico is rising as natural gas production is falling. Compare US natural gas prices to LNG prices and you begin to see why Mexico is after US natural gas. It's cheap! An $8 billion pipeline expansion of Mexican infrastructure is already planned. More than $3 billion will be spent expanding pipelines in Northern Mexico where the Net Mexico Pipeline will connect.

“NET Mexico Pipeline will be an important source of supply to meet Mexico’s growing demand for natural gas” said Joe Gutierrez, Co-President of NET. “Welook forward to this exciting new partnership with MGI and PEMEX Gas. NET Mexico is a natural next step in our pipeline system, as we connect abundant gas supply from the Eagle Ford Shale to expanding power generation and industrial markets in Mexico."

Net Midstream already operates a 30-inch, 150 mile pipeline that originates at the Brasada Processing Plant (operated by Western Gas) in La Salle County Texas. That is one Eagle Ford source and I bet we'll see others as gas production grows. Natural gas prices in Mexico are more favorable (higher), so producers will enjoy a transportation route that avoids Henry Hub.

Net Midstream also operates a pipeline that delivers gas to a 200 MW power plant in La Salle County and a 30-mile pipeline that serves the City of Corpus Christi.

Read the full press release here.

Eagle Ford Natural Gas is Headed for Mexico - Major Pipeline Expansions Planned

Gas Pipeline Arid

Eagle Ford natural gas pipeline expansions are headed for Mexico. An $8 billion expansion of Mexican natural gas infrastructure is being pushed forward. The early focus is on industrial cities in the northern half of the country where a $3 billion expansion is planned.

"Mexico has a unique opportunity, we have access to the world's cheapest gas," Mexican Energy Minister Jordy Herrera said of the U.S. supply in announcing the new pipeline plans earlier this year. "This is competitiveness for the industry of our country."

U.S. companies are lining up to help supply and construct the proposed Mexican infrastructure. Expect to see companies like Kinder Morgan reverse the direction of some of its current natural gas flows and expand pipelines into Mexico. The Eagle Ford currently produces almost 3 bcf/d, but that number could almost triple over the next five years. That's a lot of natural gas to be absorbed in South Texas. Actually, its much more than the region can absorb. If 5+ bcf/d of additional supply comes online, the natural gas will need a market. That market will either come from Mexico or from across the globe shipped as LNG. Both pipelines and liquefaction facilities come with big price tags, but don't expect PEMEX (Mexico's national oil company) to wait around. The country needs natural gas and the Eagle Ford is positioned well to answer.

Read the full story detailing Mexico's plans at chron.com