Howard Midstream Energy Partners (HEP) said due to a successful open season construction will move forward on the Nueva Era Pipeline, a 50-50 joint venture between HEP and Mexico-based energy and services firm Grupo Clisa.
The project will connect HEP’s existing Webb County Hub in South Texas directly to Escobedo, Nuevo León, Mexico, and to the Mexican National Pipeline System (Sistema de Transporte Nacional Integrado) in Monterrey, Mexico.
Mexico’s Comisión Federal de Electricidad (CFE) will be the foundation shipper on the 200-mile, 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.
To accommodate additional interest shown, HEP will hold a new open season for expansion capacity on the Nueva Era Pipeline, running through Sept. 15. HEP has received a presidential permit from the Federal Energy Regulatory Commission that allows for the expansion of the Nueva Era of up to 1.12 Bcf/d.
“This agreement with the CFE marks an important step not only for Howard Energy Partners, but for the energy and midstream industry as a whole, as cross-border relationships and business between the U.S. and Mexico continue to grow,” said Mike Howard, chairman and CEO of Howard Energy Partners. “By developing a new pipeline that will directly connect Monterrey’s industrial demand center with South Texas natural gas production, we not only help the CFE significantly reduce energy costs to its customers, we create a whole new market for our customers. It is a win-win situation.”
The CFE, Mexico’s government-owned electric power generation company, said last week that the Nueva Era Pipeline “provided the best economic conditions” for moving natural gas directly to the industrial demand center in Mexico.”
Construction on the pipeline is expected to begin in early 2016, with an in-service date of June 2017. The potential expansion will not affect the project schedule. HEP will manage all project construction and operations upon completion.