El Paso to jointly develop Mexican pipeline infrastructure

September 28, 2004--Houston-based El Paso Corp. and DKRW Energy LLC announced last Thursday that they have entered into a joint agreement to develop up to 350 miles of natural gas pipeline infrastructure to be built within Sonora, Mexico.

The project will be executed through the companies' wholly owned subsidiaries, El Paso Blue Atlantic US Inc. and Sonora Pacific Mexico.

The pipelines will transport natural gas provided by Sonora Pacific LNG, a 1.3 billion-cubic-foot-per-day LNG facility proposed for Puerto Libertad on the Gulf of California.

The pipeline will initially distribute natural gas to Naco, Hermosillo, Guaymas, Ciudad Obregon and Navojoa. An export line through Nogales, Ariz. would interconnect with the El Paso Natural Gas interstate pipeline system at the Mexico/United States border. The natural gas would then be transported into the EPNG mainlines for further distribution in the western United States markets.

Initial operations are targeted for 2008.

A total of 500 million cubic feet per day of natural gas is expected to be consumed in Sonora, primarily in the power generation sector, while 800 MMcf/d is planned to be shipped to the United States.