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PEMEX to work with Guatemala for gas pipeline construction

22nd January 2014

PEMEX will collanborate with the Guatemalan government to build a 600-kilometer gas pipeline worth $1.2 billion

Pemex gas station

Pemex, Mexico’s state-owned oil company, in conjunction with the Guatemalan government will build a $1.2 billion, 600-kilometer gas pipeline that will connect the two countries and give local manufacturers access to cheaper energy, a spokesman for the Guatemalan president told to Reuters.

Presidents from both nations will sign a bilateral agreement at the World Economic Forum in Davos next week approving the construction of the pipeline, which will be situated between Salina Cruz, Mexico and the southern department of Escuintla, Guatemala, revealed Francisco Cuevas, a spokesman for the Guatemalan president.

Cueves revealed that Pemex will construct 420 kilometres, while Guatemala will build the final 180 kilometeres. He also disclosed that Guatemala plans to open the project to bidding this year, certifying that the pipeline should be operational by 2016.

"The construction puts the focus on the transport of gas from Mexico to Guatemala," Cuevas added. "It's a fundamental step for the country."

Because Guatemala does not produce natural gas, Cuevas said that the pipeline will give Guatemalan manufacturers access to inexpensive Mexican gas, which will enable them to become more competitive.

Guatemala's energy sector is small, but the government has been trying to develop it.

Mexico’s President, Enrique Pena Nieto, signed a bill into law last month that concluded the country's 75-year-old oil and gas monopoly.

Under the new law, foreign companies will be able to participate in the sector, bringing their expertise and efficiency to the struggling Pemex.

 

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