Suspension Deal Avoids Nixing Of Sonoran Pipeline Contract

Published: Tuesday, August 6, 2019 - 4:23pm
Updated: Wednesday, August 7, 2019 - 8:55am

The company behind a major pipeline project in Sonora — the Mexican state to Arizona’s south — has reached a deal to avoid losing the contract.

If completed, the second segment of IEnova’s Sonoran pipeline would carry American natural gas roughly 200 miles southeast from Guaymas, Sonora, to El Oro, Sinaloa.

That project has been held up since August 2017 by opposition from some members of the Yaqui indigenous group. The company’s 2012 deal with the CFE, the federal energy utility, calls for the contract to be ended if service stops for more than two years, a deadline fast approaching.

But this week the company announced a suspension deal with the CFE that gives IEnova four months to get the pipeline up and running, according to a recent release from the company.

“It demonstrates the Mexican government’s willingness to work with these companies,” said Rick Margolin, a senior natural gas analyst with Genscape.

Energy companies had recently been shaken by the government’s decision to seek contract changes in arbitration. IENova’s Guaymas-El Oro project was among them.

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