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Mexico's Guaymas-El Oro natural gas pipeline waiting on court to resume operation: sources

IEnova's Guaymas-El Oro natural gas pipeline in Northwestern Mexico willremain out of operation for an indefinite period while a federal districtcourt weighs the merits of a demand against the project from a localindigenous group, sources said.

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The Seventh District Court of Ciudad Obregon on March 2 refused a legalmotion from Mexico's Energy Secretariat, referred to as SENER, to lift atemporary injunction against the repair of damage to the pipeline that wascaused by the indigenous group.

The 510 MMcf/d pipeline was completed in April 2017 by IEnova amid atemporary injunction that prevents the company from working on Yaquiterritory. In April 2016, the court imposed a temporary injunction on theconstruction of the project until it finished hearing the complaint from theYaqui tribe of Lomas de Bacum against the project.

However, it was not clear from the injunction whether it prevented thecompany from building only at Bacum or the whole Yaqui territory where othertribes also live, a source within IEnova said.

The project had the support of seven other area tribes, as well as SENER.Bacum's opposition was not seen as a deterrent to construction by SENER, andIEnova proceeded to build the pipeline through 90 kilometers of Yaquiterritory, avoiding the Bacum area because of the injunction, according to theIEnova source. Shortly after the pipeline was completed, and gas began flowing in April2017, Bacum Yaquis damaged the pipeline as a form of protest against IEnovafor completing the project.

Bacum considers IEnova to be in contempt of the ongoing legal process,Rodrigo Gutierrez, the Bacum's technical advisor, said in an interview.

The IEnova source said the company requested permission from the court torepair the pipeline.

However, the judge said the injunction prevents IEnova not only frombuilding but also from repairing the pipeline across the whole Yaquiterritory.

The defense appealed this decision to a circuit court unsuccessfully.

"IEnova is waiting for the district court to decide on the merits of thelegal process and, consequently, reestablish the operation of the pipelinethat was illegally vandalized and sabotaged by the Loma de Bacumrepresentatives," IEnova said in an emaied statement.

A final resolution is expected in the coming months, both the plaintiffand the defendants said. Both groups declined to say when the pipeline couldbe once again operational.

However, if any of the parties is unhappy with the outcome, they couldappeal the final resolution at a federal circuit court, further delayingrepairs, Gonzalez said.

The Bacum prefer IEnova to move the pipeline to an alternate150-kilometer route outside Yaqui territory. However, sources have said thisis not viable as the pipeline is already installed in Yaqui territory.

Gonzalez said the Bacum is open to the project staying in Yaquiterritory. "We aren't against the pipeline or progress. We only wantsecurity for the people and just payment for their lands," Gonzalez said. --Daniel Rodriquez, newsdesk@spglobal.com

--Edited by Derek Sands, newsdesk@spglobal.com