Central America could share the North’s shale bonanza

A proposed gas pipeline between Mexico and Guatemala could be extended to other Central American countries to ensure the economic viability of the project, Mexican authorities have told Interfax. “Like any other project of its kind, [it] involves substantial initial costs,” a spokesman for Mexico’s Energy Ministry said. “To make it viable, it is essential to ensure sufficient gas demand and long-term profitability. Therefore, extending the pipeline to Guatemala and other countries in Central America is of great importance.”The news is a boon for energy-starved Central American countries, which pay a premium for crude and coal imports. An extension of the pipeline would theoretically provide the region with access to cheap North American shale gas, because the majority of Mexico’s imports come from the Eagle Ford formation in Texas. The proposed pipeline will run between Salina Cruz in Mexico to the city of Escuintla in south-central Guatemala, and will also include a 120 MW power plant. Salina Cruz connects to Mexico’s main pipeline network via a spur from the southeastern city of Minatitlán. The Mexican and Guatemalan governments will manage the pipeline’s construction, but it will be financed privately, the Guatemalan Energy Ministry told Interfax earlier this month. Mexico will provide $365 million of the investment for the $527 million project, while Guatemala will put up the remaining $162 million.

via The extension of a proposed gas pipeline from Mexico to Guatemala is of “great importance” to the economic viability of the project, a Sener spokesman tells Interfax. – Natural Gas Daily – Interfax Global Energy.

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