By Marie C. Baca / Journal Staff Writer

ALBUQUERQUE, N.M. — “New Mexico Gas Co. is moving forward with plans to build the state’s first natural gas pipeline to Mexico.
Teala Kail, a spokeswoman for the utility, said the company will seek a federal permit to begin building the pipeline and expects construction to be completed within a year.

“It’s a big opportunity for the state,” Kail said. “To be able to export natural gas to Mexico — that’s real economic development.”

Kail said the $5 million project will involve extending the company’s existing pipeline in Santa Teresa about five miles to the Mexican border, as well as making it wider in order to increase capacity. Additional facilities would need to be built on the Mexican side of the border to begin exporting.

The project will be funded at shareholder expense, said Kail, meaning the costs associated with the pipeline will not be passed on to customers.

Wally Drangmeister, a spokesman for the New Mexico Oil & Gas Association, said he is aware of several natural gas producers who are meeting with Mexican energy industry representatives in the hopes of taking advantage of the new pipeline once it is constructed.

“Any time there are new markets for oil and natural gas, that’s a very good thing,” he said. “There’s a lot of excitement.”

A presidential permit issued by the U.S. Department of State is required for pipelines that reach the border between the United States and Canada or Mexico. The company expects the permit process will take a few months to complete, said Kail.

The plans come amid Canadian energy company Emera Inc.’s acquisition of New Mexico Gas Co.’s parent company. Under a June settlement related to the New Mexico Public Regulation Commission’s approval of the transaction, New Mexico Gas agreed to construct the pipeline in order to enhance the state’s ability to export gas.

In PRC hearing testimony quoted by the settlement, Emera President and CEO Chris Huskilson said investing in economic development projects is beneficial for both the state and Emera.

“Our business does better when the economy of the state does better,” Huskilson stated in the testimony. “And so to invest in economic development in this state is something that is very easy, again, for us to agree to. Because it’s critically important to our business that the state is healthy and that the state is growing.”

New Mexico Gas Co. is the state’s largest natural gas utility, serving more than 515,000 customers. It was acquired by the Florida-based TECO Energy in 2014. On July 1 of this year, Emera acquired TECO in a $10.4 billion all-cash deal. In addition to the PRC, the deal was also approved by the Federal Energy Regulatory Commission and TECO shareholders.

Under the settlement filed with the PRC, New Mexico Gas also has committed to keeping 675 full-time jobs in the state and will create a $10 million matching fund to build pipelines in unserved and underserved communities.

Mike Lonergan, a spokesman for Gov. Susana Martinez, said in an email that the governor had received a briefing on the pipeline from Emera.

“She’s encouraged by plans to help continue to find new markets for our abundant energy resources,” said Lonergan in the email.”

Correction: This article originally reported that the pipeline would be completed by the end of the year. New Mexico Gas Co. said they expect the pipeline to be completed within a year.