Mexico has begun construction of the Topolobampo-El Encino natural gas pipeline in the northwestern state of Sinaloa, which will contribute to the generation of cheaper electricity and feed a new fertilizer plant.
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The pipeline will diversify industry in Mexico’s northwest, as well as create jobs and boost economic development in the region, said Ochoa Reza, chief executive of state-owned utility CFE.
The pipeline will supply natural gas to a US$1bn fertilizer plant, the largest in Latin America, to be built in Topolobampo port, as reported by BNamericas earlier this month.
Switzerland-based petrochemicals company Proman Group will partner with Mexico’s GPO to build the plant.
CFE and Gas y Petroquímica de Occidente signed an agreement to distribute the natural gas supplied by the new pipeline.
Mexico will build 22 natural gas pipelines over the next 15 years to increase supply across the country as it strives to boost output to meet rising demand and to reduce prices, according to the energy ministry (Sener).
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The first five pipelines will require a US$2.5bn investment.
Natural gas is used to generate 50% of Mexico’s electricity and is expected to generate 75% by 2018, while demand is expected to grow 3% annually and consumption by the industrial sector is expected to rise 72%, Javier Estrada, Sener general director for energy planning, said last week at the BNamericas Energy Summit in Mexico City.