ONEOK Inc. subsidiary Saguaro Connector Pipeline filed an application with the U.S. Federal Energy Regulatory Commission (FERC) to build proposed facilities to move more Permian Basin natural gas to Mexico.

Saguaro Connector Pipeline filed a presidential permit with the FERC to build and operate facilities to export gas from a new international border-crossing at the U.S.-Mexican border in Hudspeth County, Texas, ONEOK announced Dec. 20 in a press release.

The proposed facilities would connect upstream with the Saguaro Connector Pipeline intrastate gas pipeline, which would be designed to transport gas from ONEOK's existing WesTex intrastate gas pipeline in the Permian Basin in West Texas to Mexico, midstream service provider, Tulsa-based ONEOK said.

The facilities would also connect at the international boundary with a new pipeline under development in Mexico to ship to an export facility on Mexico’s West Coast.

The potential 48-inch diameter Saguaro Connector Pipeline would start at the Waha Hub in Pecos County, Texas, and span approximately 155 miles to the U.S. border with Mexico. The pipeline would have the capacity to transport approximately 2.8 Bcf/d.

A final investment decision related to the proposed pipeline is expected by mid-2023.

U.S. gas for Mexico

U.S. gas supply is expected to reach 100.4 Bcf/d in 2023, up almost 1% compared to 2022, the Energy Information Administration said in its Dec. 6 short-term energy outlook.

Despite the low production growth forecast, the volumes will allow the U.S. to continue to destine around 20% of its volumes for export either in the form of LNG or piped-gas to Mexico.

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Mexico, where gas supply continues to lag demand despite efforts by state-owned Petróleos Mexicanos (Pemex) to revert the scenario, will be the initial market for the gas to potentially flow through the Saguaro Connector Pipeline.

Mexico’s demand for U.S. gas is expected to remain robust as a number of LNG export projects in the country continue to move forward that will source U.S. gas and which are being advanced by companies from San Diego-based Sempra to Singapore-based LNG Alliance.

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