Western Gas Marketing Ltd. (WGM), Calgary, has started shipping gas under the first direct sale of Canadian gas to Mexico.
WGM began moving 10 MMcfd of gas Oct. 1 to Petroleos Mexicanos International (PMI), the purchasing arm of Petroleos Mexicanos, Mexico's national oil company. Deliveries are made under a 30 day contract. Price is $1.90 (U.S.)/Mcf at the Alberta border.
WGM gas from Alberta flows more than 2,610 miles to reach industrial customers in northern Mexico. Gas leaves Canada at Monchy, Sask., and moves through Northern Border Pipeline Co.'s pipeline system to Clear Lake, Iowa, where it transfers to Natural Gas Pipeline Co. of America's system and flows south to Carthage, Tex. The gas is picked up at Carthage by Valero Transmission Co., which transports it to a point near McAllen, Tex. There it crosses the Rio Grande River into Mexico at Reynosa, Tamaulipas state.
WGM, a marketing unit of TransCanada PipeLines Ltd., has about 18 tcf of gas under contract from about 720 Alberta gas producers. PMI this month expects to buy about 350 MMcfd of gas through U.S.-Mexican pipeline border crossings.
David Hanson, Western vice-president of short term marketing, said the sale shows it is possible for Canadian producers to sell gas to Mexico.
Margaret Perez, PMI assistant manager of gas acquisitions, said the deal was made possible partly because of the North American Free Trade Agreement signed in San Antonio by leaders of the U.S., Canada, and Mexico.
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