Kinder Morgan’s EPNG Contracts To Serve Mexican Customers

January 2013, Vol. 240 No. 1

El Paso Natural Gas (EPNG), owned by Kinder Morgan Energy Partners, L.P. and Kinder Morgan, Inc., has entered into a 25-year transportation precedent agreement in connection with plans to build a pipeline to serve customers in Mexico.

Terms call for EPNG, acting through its affiliate Sasabe Pipeline Co., to initially provide 200 MMcf/d of firm transportation capacity via a 60-mile, 36-inch lateral pipeline that would extend from EPNG’s existing south mainlines, near Tucson to the U.S.-Mexico border, terminating at Sasabe, AZ where it would connect with a pipeline in Mexico at the direction of the Mexico Comision Federal de Electricidad.

Several possible routes are being evaluated and a final pipeline route is subject to regulatory approvals. One potential route for the Sasabe Lateral would cross portions of the Buenos Aires National Wildlife Refuge along Highway 286 and would require approval from the U.S. Fish and Wildlife Service.

The project falls under the jurisdiction of the FERC. The pre-filing process was initiated with the Commission in April 2012. Subject to regulatory approvals, construction could begin in 2014, with anticipated in-service in September 2014.