Mexico aims to expand gas pipeline network

Aug. 20, 2012 at 8:45 AM
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HOUSTON, Aug. 20 (UPI) -- The Mexican government aims to expand its natural gas pipeline system with U.S. reserves, though at least one analyst advised a cautious approach.

The Mexican government plans to invest $8 billion to expand its natural gas pipeline system that could be fueled by the South Texas and Eagle Ford plays in the United States, reports the Houston Chronicle.

The U.S. Energy Department reports that natural gas exports from the United States to Mexico totaled 500 billion cubic feet in 2010.

Incoming Mexican President Enrique Pena Nieto is expected in October to award $3 billion in contracts for pipeline networks slated for industrial centers in northwest and central Mexico.

The Chronicle notes that energy ambitions from the incoming Nieto administration will depend in large part on the new Congress.

Bill Gwozd, vice president at consulting company Ziff Energy, told the newspaper he was hedging his bets given the regional price outlook for natural gas.

"Spending money is easy," he said. "Doing it properly takes due diligence."

Pipeline company Kinder Morgan declared last week, however, that it was keen to connect networks in Arizona to a 600-mile pipeline system that could eventually run to the port city of Mazatlan.

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