Pipeline taking Eagle Ford natural gas to Mexico

Fuel Fix:
A new pipeline project will help move Eagle Ford Shale natural gas into Mexico’s growing energy market.

Houston-based NET Midstream on Friday announced it will build a 124-mile pipeline to transport natural gas from the Eagle Ford Shale region to the Mexican border.

The deal is anchored by a long-term agreement to transport 2.1 billion cubic feet of gas per day with MGI Supply Ltd. a subsidiary of Mexico’s state-owned gas company.

NET Midstream’s subsidiary, NET Mexico Pipeline LP, will build the 42-inch pipeline from a hub in Agua Dulce in Nueces County to a point near Rio Grande City in Starr County.

Although Mexico has vast natural gas reserves, it hasn’t been able to develop them quickly enough to meet the country’s consumption, which has been climbing at four times the pace of overall economic growth at times in the past decade.

Mexican officials in August announced that the government’s petroleum monopoly, Petroleos Mexicanos, or Pemex, would use a Cayman Islands subsidiary to help finance a pipeline connecting the Agua Dulce gas hub to Mexico’s pipeline system on the border outside McAllen.

It would feed South Texas gas to the planned Los Ramones pipeline, which will run some 700 miles from the border through Monterrey and on to Aguascalientes state, supplying Mexico’s rapidly developing automotive manufacturing heartland.
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Because of the glut of gas in the US this is a win-win deal.  Many times drillers have had to flare the gas because their is no readily available domestic market.  Selling it to Mexico make sense for both sides of the border.  One of the things that has inhibited gas development in Mexico is the poor management of the state monopoly and the danger of kidnapping or worse by the drug cartels if they brought in US companies to help exploit the resources.

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