Friday, August 5, 1'9??

fHE MICHIGAN DAILY

Page Nine

Friday. August 5, 1977 FIlE MICHIGAN DAILY Page Nine

... nd
HOUSTON (AP) - Six U.S.
pipeline companies have sign-
ed a "memorandum of inten-
tion" with the national utility
of Mexico to build an 850-mile
pipeline and import Mexican
natural gas into the United
States, the firms and the utility
said yesterday.
A spokesman for Texas East-
ern Transmission Corp. of Hous-
ton said initial deliveries were
expected to amount to about SI
million cubic feet per day by
late this year, with volume
eventually reaching a maximum
of two billion cubic feet per
day.
MEXICAN OFFICIALS said
the arrangement could meet as
much as three per cent of the
United States' natural gas de-
mands.
The gas would be purchased
from the Mexican utility - Pe-
troleos Mexicanos (PEMEX) -
and piped in from the Reforma
area on the Gulf Coast of south-
ern Mexico through a 48-inch
pipeline. The proposed pipeline
would enter the U.S. at McAllen,
rex., and link up an existing
pipeline network in southern
Texas.
"It is important to remember
that no contracts have been
Signed," the Texas Eastern
,pokesman said. "I- think what
.he companies are doing is say-
ig they will go ahead with
this. We don't know what the
price of the gas will be. That
fitare is tied to the price of
Nsmber 2 fuel oil in "New York
a}rbor."
PEMEX said that price is cur-
rently calculated at about $2.50

now, the Mexican pipeline

a thousand cubic feet. Presi-
dent Carter's proposal for main-
taining regulations on domesti-
cally produced natural gas calls
for a maximum price of $1.75
per thousand cubic feet.
PEMEX said in Mexico City
that the agreement was signed
with a consortium made up of
Southern Natural Resources Co.
of Birmingham, Ala., and Ten-
neco, Inc.; Texas Eastern; El
Paso Natural Gas Co.; Trans-
continental Gas Pipeline Corp.,
and Florida Gas Co., all of
IHouston.
A spokesman for the El Paso
Co. said the agreement will be
for an initial period of six years,
plus an option for an additional
six-year period.
EARLY PROJECTIONS esti-
mate the line should be in full
production by 1981.

PEMEX said it hopes to build
the pipeline, estimated to cost
about $1 billion, with financing
from the U.S. Export-Import
Bank.
The Reforma field has an es-
timated 20 trillion cubic feet in
natural gas reserves. The pipe-
line will also link up with gas-
fields still not fully explored in
the region of Tampico and Rey-
nosa.
The Alaskan fields in Prud-
hoe Bay contain an estimated
26 trillion cubic feet of natural
gas.
Il Church A 995.5955

PEMEX's discovery of ,the exports to mnore than 110 nil-
Reforma oilfields on the Bay lion barrels by the encd of 1980.
of Campeche four years ago
turned Mexico from an oil im- Gas sales alone over the new-
porter into an oil exporter. ly built pipeline are expected
Mexico currently sells approx- to net Mexico $1.8 billion a year,
imately 200,000 barrels of crude I ;EMEX said, and help offset
oil a day, mostly to the United the'o'ntry's enirmous $28 bil-
States, and expects to increase lion foreign debt.
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