Sierrita Details Planned System Expansion, Additional Compression on Sierrita Pipeline

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Following a successful open season, Sierrita Gas Pipeline LLC announced details of a planned expansion and development of compression facilities on the Sierrita pipeline, which was placed in service on Oct. 31, 2014. The approximately 60-mile, 36-inch diameter pipeline currently provides 200,846 Dth/d of firm transportation capacity and extends from Kinder Morgan Inc.’s El Paso Natural Gas south mainlines, near Tucson, AZ, to the United States-Mexico border near Sasabe, AZ.

In response to expressions of interest, Sierrita conducted an open season for expansion capacity. The open season closed on Oct. 5, 2015. Sierrita received a binding bid from Mexico’s Comisión Federal de Electricidad (CFE) and awarded to CFE a minimum expansion volume of 230,254 Dth/d by April 2020 for a term of approximately 19.5 years. CFE can elect to increase the expansion capacity to 309,154 Dth/d by providing notice to Sierrita no later than Feb. 29, 2016. In order to facilitate the expansion service, Sierrita is planning to install a new 16,000-21,000 horsepower compressor station and undertake modifications to existing meter station facilities. The pipeline’s current design capacity is fully subscribed under a 25-year firm transportation agreement with CFE. Depending on CFE’s final volume election, the revised firm transportation capacity of the pipeline will be 431,100 Dth/d or 510,000 Dth/d, after commissioning of expansion facilities.

“Through this project, Sierrita and its partners are pleased to be able to provide customers in Mexico with additional capacity and incremental future supplies of clean, efficient natural gas,” said Sierrita Vice President Greg Ruben. “The initial Sierrita project created temporary jobs, permanent tax benefits for the state of Arizona and the means to transport abundant, cost-efficient U.S. gas production to Mexico.

“As with the initial Sierrita project, this long-term endeavor represents a continuing and highly successful, multi-national cooperative effort on the part of companies whose parent corporations are headquartered in the U.S., Mexico and Japan. Notably, Sierrita assists Mexico to meet its environmental goals of converting existing fuel-oil-fired power generation plants to efficient, clean burning natural gas and provide natural gas to fuel future power plants,” Ruben said.

The Sierrita Pipeline interconnects with an existing natural gas pipeline in Mexico owned by IENova.