ONEOK Partners and Fermaca to build Export Natural Gas Pipeline from West Texas to Mexico

Subscribe to our newsletter and get the latest news and business opportunities in your inbox
ONEOK Partners and Fermaca to build Export Natural Gas Pipeline from West Texas to Mexico

ONEOK Partners LP has recently announced that it has entered into a 50-50 joint venture with a subsidiary of Fermaca, a Mexico City-based natural gas infrastructure company, to construct a pipeline that would transport natural gas from the Permian Basin in West Texas to Mexico.

The Roadrunner Gas Transmission pipeline project extends from ONEOK Partners' ONEOK WesTex Transmission natural gas pipeline system at Coyanosa, Texas, west to a new international border-crossing connection at the USA and Mexico border near San Elizario, Texas, where it will connect with Fermaca's Tarahumara Gas Pipeline. 

The project, to be constructed in phases, includes approximately 200 miles of new, 30-inch diameter pipeline currently designed to transport up to 640 million cubic feet per day (MMcf/d) of natural gas, with up to 570 MMcf/d to be transported to Mexico's growing markets.

Precedent agreements representing the initial design capacity have been executed with the Comisión Federal de Electricidad (CFE), Mexico's national electric utility, and a subsidiary of Fermaca. All transportation agreements will be firm (take-or-pay) and have a term of 25 years.

The first phase of the pipeline project for 170 MMcf/d of available capacity is expected to be completed by the first quarter 2016. The second phase, which will increase the pipeline's available capacity to 570 MMcf/d, is expected to be completed in the first quarter 2017. The third and final phase of the project is expected to be completed in 2019 and will increase available capacity on the pipeline to 640 MMcf/d.

ONEOK Partners will manage the construction of the project and will be the operator of the pipeline upon its completion. The estimated cost of the project is approximately US$450 million to US$500 million.

Since Partners Group, investor in Fermaca, raised more than US$500 million in 2015 in additional equity to support the expansion of the company, Fermaca has been awarded for the development of several gas projects by the Mexico's Comisión Federal de Electricidad (CFE), such as Villa de Reyes-Aguascalientes-Guadalajara gas pipeline and La Laguna-Aguascalientes gas pipeline projects.

Terry K. Spencer, president and chief executive officer of ONEOK Partners, said:

"We are pleased to partner with Fermaca on this strategic pipeline project and about the opportunity to add to our extensive 36,000-mile integrated network of natural gas and natural gas liquids pipelines. ONEOK Partners' strategically integrated assets position us well to provide this service to the CFE and the expanding natural gas markets in Mexico. We look forward to building a long-term, strategic relationship with the CFE and to this project meeting the ongoing demand needs of the large natural gas consumers in Mexico."

Manuel Calvillo Alvarez, chief operating officer and executive vice president of Fermaca, added:

"The signing of this joint venture agreement with ONEOK Partners is another key step in Fermaca's plans to extend its network of gas pipelines across Mexico and into the USA. A confluence of factors, including ambitious growth targets, a favorable regulatory and political framework, and an abundance of planned projects mean that it is a great time to be investing in the build-out of natural gas infrastructure in and around Mexico. In ONEOK, we have found a partner that recognizes the Mexican opportunity, and we really look forward to working with them."

List of country news

Country news

  • April 01, 2016

    Fermaca wins Mexican gas pipeline project

    Mexico's Comision Federal de Electricidad (CFE), the state-owned electric utility of Mexico, recently said that Fermaca Pipeline de Occidente submitted a bid of US$269,859,462 million and was the lowest bid for the Villa de Reyes-Aguascalientes-Guadalajara gas pipeline project. Read more
  • April 01, 2016

    Enel Green Power wins nearly 1GW capacity in Mexican renewables auction

    Enel Green Power (EGP), acting through its subsidiary Enel Green Power México, has been awarded the right to sign contracts for 15-year energy supply and 20-year clean certificate supply with three PV solar projects for a total capacity of around 1 GW in Mexico in the country’s first long-term public tender since its energy reform. Read more
  • March 28, 2016

    CFE launches tender for Hermosillo Gas Pipeline Branch

    Mexico's Federal Electricity Commission (CFE), a state-owned electric utility, has launched a tender process for the Hermosillo Gas Pipeline Branch in the state of Sonora, Mexico. Read more
  • March 22, 2016

    Monterra Energy announces refined products pipeline in Mexico

    Monterra Energy has recently announced its plan to build a refined products pipeline to improve efficiency and competition in Central Mexico. Read more
  • March 22, 2016

    Fermaca wins La Laguna - Aguascalientes gas pipeline

    Mexico's Federal Electricity Commission (CFE) has recently awarded the development and operation of the La Laguna–Aguascalientes gas pipeline project in Mexico to Fermaca. Read more

Share this news

Join us

In order to get full access to News section, you must have a full subscription. You can check all the benefits of becoming a member and purchase a subscription on our membership page.