Los Ramones Natural Gas Pipeline

The Los Ramones natural gas pipeline extends across the states of San Luis Potosi, Queretaro, and Guanajuato in Mexico. The 860km-long Los Ramones natural gas pipeline imports up to 2.1 billion cubic feet a day of natural gas from shale gas locations in the US to Mexico.

The facility is expected to meet 20% of Mexico’s natural gas requirements.

The gas pipeline project comprises three sections, and was implemented in two phases. Construction works for Phase I started in March 2014, and commissioning was completed in December 2014.

Construction on Phase II South / Sur commenced in August 2014 and was completed in early 2016.

Los Ramones Pipeline ownership and operations

The owner for Phase I of the project is Gasoducto del Noroeste, a joint-venture between Pemex Gas y Petroquimica Basica (PGPB), a subsidiary of Pemex, and Ienova (Sempra Mexico).

The sections constructed under Phase I are operated by Gasoductos de Chihuahua, a subsidiary of PGPB, for a period of 25 years. The natural gas from the pipeline is being purchased by MGI Supply.

SunGard provides assistance to the operator in managing the pipeline operations.

Phase II South was implemented by the joint venture of GDF Suez and Pemex. The former operates the section. The owners  the Los Ramones II North Gas Pipeline are IEnova and  TAG Pipelines, a unit of Pemex.

Los Ramones gas pipeline Phase I details

Phase 1 involved the construction of a 48in-diameter, 118km-long pipeline starting from the interconnection point of the Agua Dulce-Frontera pipeline in Camargo, Tamaulipas, bordering the US.

This supplies the natural gas for the Los Ramones pipeline, and culminates at Los Ramones, Nuevo Leon.

Two compression stations at each end, with a rated capacity of 100,000hp each, were also constructed.

The pipeline under Phase I has a designed capacity of delivering 2,100 million cubic feet a day of gas (mmcfd).

Los Ramones gas pipeline Phase II details

The interconnection point for both the sections under the phase II is located in the Municipality of Villa Hidalgo in the state of San Luis Potosi.

The 42in diameter Los Ramones II South / Sur spans 291.7km from San Luis Potosi to Apaseo El Alto, Guanajuato. This section of the pipeline has a designed capacity to deliver 1.42 billion cubic feet a day of natural gas.

Los Ramones II North involved the installation of a 42in diameter gas pipeline and a 450km-long pipeline, as well as the construction of two gas compression stations with a capacity of 61,000HP each. It generated 1,480 construction jobs and 3,000 indirect jobs.

Phase II North starts from Nuevo Leon, traverse Tamaulipas state and end at San Luis Potosi. Its minimum delivery capacity is 1.43 billion cubic feet a day of natural gas.

The phase II also involved the construction of four metering stations at San Luis Potosi, San Luis de la Paz, Parque Industrial Queretaro and Apaseo el Alto, installation of 24 main line valves, and construction of a main control room and a back-up control room.

Contractors involved with the Mexican gas pipeline project

The engineering, procurement and construction contractor for the pipeline and compressor stations for the phase 1 was Bonati, while Tubacero supplied the entire pipe components. Laurini deployed two of its Grub 1,22- Vulcano machines for the project.

The engineering, procurement, construction, testing, commissioning, and start-up services contract for Ramones Phase II South was awarded to ICA Flour, a joint venture of Flour and Empresas ICA, in April 2014, while the construction contract for Los Ramones II North Gas Pipeline was awarded to Odebrecht Infrastructure, Arendal and Techint in March 2014.

Capstone Turbine was awarded a contract in December 2014 to supply six C800 microturbines for two compressor stations and 16 C30 micro-turbines for the metering stations under the phase II.

Financing for the natural gas pipeline

The overall project attracted an estimated investment of Mex$55bn (approximately $3.7bn). A loan of about $665m for the phase I was provided by the Bank of Tokyo Mitsubishi UFJ / Union Bank, BBVA / Compass, Crédit Agricole, ING Capital, Natixis, Nord / LB, Royal Bank of Canada, and Santander. These lenders were advised by Milbank.

Los Ramones II South was financed by an $890m loan. Shearman & Sterling is the advisor to the lenders.