2013 Pipeline Construction Report

By Rita Tubb, Managing Editor | January 2013, Vol. 68, No. 1

Canada remains fully committed to construction of the 1,179-mile Keystone XL Pipeline from Hardisty, Alberta, to Steele City, NE. TransCanada indicated it still anticipates approval of the Presidential Permit application - which is required as the pipeline will cross the Canada/U.S. border - in the first quarter of 2013, after which time construction will quickly begin.

TransCanada is active in Mexico where its subsidiary, Transportadora de Gas Natural del Noroeste, will build, own and operate the El Oro-to-Mazatlan pipeline for the Comisión Federal de Electricidad (CFE). The $400 million pipeline project will begin at El Oro and end in Mazatlan, in the state of Sinaloa. The 24-inch pipeline will be 257-miles and have contracted capacity of 202 MMcf/d. The pipeline is expected to be in service in late 2016. It will interconnect with the El Encino-to-Topolobampo pipeline that TransCanada was awarded the contract to build, own and operate. Construction of the two pipelines is supported by 25-year natural gas transportation service contracts with the CFE.

Sempra Mexico’s parent, Sempra International, was awarded two contracts by the CFE to construct, own and operate a 509-mile, US$1 billion pipeline network connecting the northwestern states of Sonora and Sinaloa. The network will be built in two segments that will connect with the U.S. interstate system in Arizona and provide natural gas to power plants. The first segment, a 36-inch, 310-mile line will extend from Sasabe, south of Tucson to Guaymas, Sonora. Its capacity will be 770 MMcf/d. Commissioning is expected by late 2014.

The second segment will extend from Guaymas to El Oro, Sinaloa. It will be a 30-inch, 190-mile pipeline with capacity of 510 MMcf/d. Commissioning is expected in mid-2016.

Caribbean, South & Central America

Planned pipelines continue to outnumber actual mileage under construction throughout this region with Brazil continuing to lead in activity.

In Argentina, national oil company YPF SA wants help from Norway's Statoil to develop its potentially huge shale gas resources. YPF CEO Miguel Galuccio unveiled an ambitious five-year growth plan that he hopes will lead foreign oil companies to help YPF develop shale gas reserves believed to be the world's third-largest. Much of this will depend on YPF's ability to properly exploit the 774 Tcf of gas and 23 Bboe that the U.S. EIA estimates lies trapped in the Neuquen basin.