Mexico To Construct A Major Natural Gas Pipeline To Bring U.S. Natural Gas

Creative Commons/Glen Dillon

Creative Commons/Glen Dillon

The CFE, Federal Electricity Commission, of Mexico announced that it is going to begin 24 new infrastructure projects that will help build the energy infrastructure of the country. The projects will cost around $10 billion out of which $3 billion will be used to install an underwater pipeline from the US to Veracruz that will bring natural gas to the country. The infrastructure is being created to help place a large emphasis on the importation of natural gas reserves from the US. This is of course one of the largest projects to be attempted by Mexico yet in terms of energy, but due to the increasing gas consumption of the country it is very necessary.

There are many concerns about the massive natural gas project the most imperative of which is whether or not Mexico will actually be able to complete it. The project will not only include a high budget, but it will also require a lot of local capacity in order to complete it. Of course, skeptics are also questioning whether or not this large of a natural gas project needs to be completed. Once completed the pipeline would be able to pass 2.6 billion of gas into Mexico every day. If the project begins in a timely fashion it is expected to be completed by 2018.

In terms of financing the Texas pipeline, the CFE has several different options. Many US companies that already operate natural gas pipelines in Mexico have expressed interest such as IEnova. In addition, there are some new gas companies that are also expressing interest in investing in Mexican pipelines such as Carlos Slim’s Carso Energy. It is also possible that the pipeline contract could go to a global partner as pipeline infrastructure is more complex in other countries compared to North America.

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