The pipeline is a 50-50 joint venture between HEP and Mexico-based energy and services firm Grupo Clisa, connecting HEP’s existing Webb County Hub in South Texas directly to Escobedo, Nuevo LeÌ_n, Mexico, and to the Mexican National Pipeline System (Sistema de Transporte Nacional Integrado) in Monterrey, Mexico.
Mexico’s ComisiÌ_n Federal de Electricidad (CFE) will be the foundation shipper on the approximately 320 km, 30 inch Nueva Era Pipeline and will transport 504 MMcf/d of natural gas on the system for a 25-year term to help fuel combined-cycle power plants in Escobedo, near Monterrey.
HEP to launch additional open season
To accommodate the additional interest received in the initial open season, HEP will conduct a new open season for expansion capacity on the Nueva Era Pipeline, closing 15 September.
HEP already has received a presidential permit from the Federal Energy Regulatory Commission that allows for the expansion of the Nueva Era Pipeline up to 1.12 Bcf/d of capacity.
In a statement made earlier this month, the CFE expressed that the Nueva Era Pipeline “provided the best economic conditions” for moving natural gas directly to the industrial demand centre in Mexico.
By connecting directly to HEP’s strategically located assets in Webb County, the Nueva Era Pipeline will connect the wellhead directly to the consumer, providing a new, more direct route for South Texas natural gas to enter Mexico compared to the more traditional routes by which the natural gas must move farther south before crossing the border.
Construction on the Nueva Era Pipeline is expected to begin in early 2016, with an in-service date of June 2017, subject to meeting all regulatory requirements and finalising definitive agreements.
The potential expansion will not affect the project schedule. HEP will manage all project construction and operations upon completion.