Denver — Gas began flowing on the Sur de Texas-Tuxpan export pipeline Tuesday, just one week after Mexican President Andres Manuel Lopez Obrador announced an agreement between state power generator CFE and private developers over disputed pipeline transport contracts.
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Receipts on the newly constructed pipeline surged to 50 MMcf/d Tuesday, up from volumes under 1 MMcf/d during the two weeks prior, data from the TC Energy electronic bulletin board showed.
After reaching mechanical completion in mid-June, the Sur de Texas pipeline saw receipts from Valley Crossing, on the US side of the border, rise to about 350 MMcf/d, although no deliveries were reported.
Just days later, the CFE announced that it had begun arbitration proceedings with pipeline developers TC Energy, IEnova, Fermaca and Grupo Carso over capacity payments that it argued were unjustified.
According to CFE, pipeline operators had declared forces majeure amid unforeseen delays in pipeline construction, which were largely the result of conflicts with indigenous groups over land usage and ownership.
By July, receipts on the 2.6 Bcf/d Sur de Texas pipeline dropped to zero, with the CFE threatening to keep operations on the massive export pipeline halted while the federal government and private developers awaited an outcome from arbitration proceedings in international courts.
Platts Analytics estimates that the marine pipeline could flow around 500 MMcf/d in the near term as the new supplies displace LNG imports and backfill declining domestic production. But the pipeline has a high side potential of around 1 Bcf/d, depending on the status of downstream connectivity and modifications. The STTP system will deliver gas to the Altamira V power plant, the 500 MMcf/d Monte Grande interconnect and the TC Energy Tamazunchale Pipeline at Naranjos.
The new export pipe, coupled with the Cempoala Compressor Station reversal project, should allow supply to also flow into southern Mexico, an area that has been subject to shortages this year amid falling domestic production.
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