Houston — IEnova said Tuesday the 2.6 Bcf/d Sur de Texas-Tuxpan marine pipeline would begin commercial operations "soon," with commissioning activities starting within the next few weeks.
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On its first-quarter 2019 earnings call, executives reiterated the company's outlook for the greenfield export pipeline's startup, which comes just over two weeks after its joint-venture partner, TransCanada, announced a delayed startup to the project, to sometime in June.
The announcement signals upside potential for US pipeline exports to Mexico in the coming weeks. Exports to points south of the border have averaged about 4.7 Bcf/d over the past month, but could climb another 1 Bcf/d once the marine pipeline enters service, according to S&P Global Platts Analytics.
Sur de Texas was previously scheduled to enter service April 14, but was subsequently delayed by TransCanada.
Mexico's CFE has also announced a delayed startup to the project in late June.
On Tuesday's call with investors and analysts, IEnova said that 100% of its onshore construction was complete and that poor weather conditions had delayed its offshore activities. Executives did not elaborate on final details related to construction.
The marine pipeline should begin taking feedgas for linepacking over the next few weeks.
The Sur de Texas-Tuxpan pipeline has offered the potential to help solve an ongoing gas shortage in southern Mexico by delivering new supply to Mexico City and its surrounding industries.
While only a small volume of the imported molecules are expected to reach southern Mexico, the pipe should help to leave more of southern Mexico's own production within its boundaries.
According to S&P Global Platts Analytics, initial flows on the Sur de Texas pipeline could range between 1 Bcf/d to 1.5 Bcf/d.
Imported gas supply is expected to access at least four sources of demand, including displacement of LNG import volumes at Altamira, local and regional consumption around Tuxpan, spare capacity on Tamanzuchale Pipeline and demand downstream from the Cempoala compressor station.
At Altamira, Sur de Texas supply could displace LNG imports of about 400 MMcf/d to 500 MMcf/d.
At Tuxpan, an interconnection to the Sistrangas pipeline grid at Monte Grande will access to another 500 MMcf/d of local and regional demand around Tuxpan.
A separate interconnection at Naranjos to TransCanada's Tamazunchale Pipeline will allow additional volumes to flow west and south to the interior states of Hidalgo and Queretaro. Tamazunchale's two segments could provide about 200 MMcf/d to 300 MMcf/d of spare capacity, with some potential upside to those volumes depending on the exact size of the interconnect.
Downstream from the Monte Grande interconnect, a recently completed phase-I reconfiguration of the Cempoala compressor station, should provide immediate access to at least 350 MMcf/d in additional demand from central and southern Mexico.
According to Platts Analytics, a phase-II reconfiguration of the compressor station, expected by July, could boost that number to 1.4 Bcf/d.
On the US side of the border, a precipitous rise in export volume associated with Sur de Texas could add support and volatility at South Texas basis hubs in the coming weeks, including Agua Dulce, Texas Eastern STX, Transco Zone 1, NGPL STX, Tennessee Gas Zone 0, and potentially, Houston Ship Channel.
Supply for Sur de Texas will come from Enbridge's 2.6 Bcf/d Valley Crossing Pipeline in South Texas, which has access to the Agua Dulce hub, Houston Pipeline, Texas Eastern Transmission, and potentially Transcontinental Gas Pipe Line on the US side of the border.
By later this summer, Platts Analytics expects the new marine pipeline to boost US exports to over 6 Bcf/d from current flows at 4.7 Bcf/d.
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