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FERC approves $137M Enbridge project, Pomelo line to feed Mexico markets

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FERC approves $137M Enbridge project, Pomelo line to feed Mexico markets

The Federal Energy Regulatory Commission approved a Texas Eastern Transmission LP expansion project and a related Pomelo Connector LLC pipeline project that will work together to export up to 396,000 Dth/d of natural gas to Mexico.

The commission issued a certificate order on Feb. 15 for the South Texas Expansion project, or STEP, and the Pomelo project. The projects, both in Texas, will provide Mexico's Comisión Federal de Electricidad, or CFE, with long-term firm transportation service. FERC said the projects must be ready for service by Feb. 15, 2020.

Texas Eastern, an indirect, wholly owned subsidiary of Enbridge Inc., plans to place STEP into service in October. STEP will consist of a new compressor station in Nueces County, Texas; a new compressor unit and station piping at an existing compressor station in Matagorda County, Texas; and modifications to compressor facilities in Chambers, Orange and Brazoria counties, Texas.

The approximately $137.3 million project will provide firm transportation service for CFE from a Texas Eastern interconnection with Southern Co. Gas' Golden Triangle Storage Inc. and Centana Intrastate Pipeline LP facilities in Nueces County to the Nueces Header pipeline system.

Texas Eastern filed an application for STEP in May 2015 and initially planned to place the project into service by May 2018. The pipeline company pushed back the in-service date to Oct. 1 after negotiations with CFE, which subscribed to all the firm transportation service from the STEP project for a primary term of 20 years.

The Pomelo Connector project in Nueces County will consist of a new 13.6-mile, 30-inch-diameter pipeline that will interconnect with Texas Eastern's new compressor station and will extend to a connection with Enbridge's Valley Crossing Pipeline LLC border-crossing project. The Pomelo Connector will include a new compressor station.

Pomelo, a subsidiary of Canyon Midstream Partners II LLC, will lease all of the project capacity to Texas Eastern, which will pay about $2.1 million every month. Pomelo applied for the pipeline project on Dec. 23, 2016.

On Sept. 18, FERC staff issued a favorable final environmental assessment for the projects and said they would not significantly affect the environment. (FERC dockets CP15-499, CP17-26)

In a separate order on Feb. 15, FERC approved minor modifications to Texas Eastern gas pipeline facilities in West Virginia. The project will include elevating 6.3 miles of 30- and 36-inch-diameter pipeline in Marshall County, W.Va., before longwall mining begins near the facilities. The developer will abandon some of the pipeline segments until mining activities have ended and will replace 3.2 miles of the pipeline with an upgraded pipe. (FERC docket CP17-468)