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New pipeline another step toward Mexican energy independence

Petróleos Mexicanos (PEMEX) announced this week that its Interoceanic Corridor pipeline is officially complete and will begin operation in short order. The pipeline stretches approximately 310 miles, uniting the Gulf of Mexico to the Antonio Dovalí Jaime refinery in Salina Cruz, Oaxaca on the Pacific coast.

The pipeline itself was a US$338.1 million expense for Mexico, but it comes with a wide range of benefits. PEMEX estimates that the pipeline will help improve the country’s carbon footprint, keeping 550,000 tons of carbon dioxide from the air each year. The new pipeline will also reduce the transportation time for natural gas across the southern part of Mexico.

Originally, natural gas brought to the port in Jaltipan, Veracruz, from the Gulf of Mexico was then trucked to the refinery in Salina Cruz. The new pipeline, however, will get the fossil fuel to the refinery in just seven days, less than half of the previous transport time. The pipeline’s transportation capacity will also reduce the number of ships which must pass from the Gulf of Mexico to the Pacific via the Panama Canal. Instead, their natural gas cargo will be transported to the refinery or to a fleet of ships waiting in the Pacific to be delivered to Asian, North American and South American markets.

President Enrique Peña Nieto also announced that the Antonio Dovalí Jaime refinery would receive investments to refit its operations with the new pipeline. About $668 million for the upgrades to the infrastructure, according to BNamericas.

Related: U.S. discussing possible light crude exports to Mexico-Pritzker

The investments into the refinery in Salina Cruz are not the only upgrades taking place at PEMEX refineries across the country. PEMEX plans to invest a total of $20 billion into refineries in Tula and Salamanca, as well as Salina Cruz, which will boost Mexico’s daily output of refined fuel to 139,000 barrels. The state also plans to build a total of 22 new natural gas pipelines in Mexico over the course of the next decade.

Another $270 million will be used to expand PEMEX’s tugboat line. The company currently has 16 tugboats, three supply vessels and three barges in the pipeline, BNamericas reports, but the new investments will allow for an addition of 22 tugboats. The tugboats will range from the Salina Cruz port to the open waters of the Pacific. Their primary operations will be towing, firefighting and maintenance operations where needed.

In Mexico’s push for energy independence, officials hope that natural gas will provide 75 percent of the nation’s electricity by 2018. Natural gas is currently used for about 50 percent of the energy demand. An increase in domestic production and use could have ripple effects, however, on the push for energy independence in the United States.

While Mexico is opening up 169 land and offshore oil and natural gas leases to foreign investors, which would boost international business, an increase in domestic natural gas would cut down drastically on imports. According to the San Antonio Business Journal, about 40 percent of natural gas imported by Mexico comes from the Eagle Ford Shale in South Texas.

(Note: Video is in Spanish.)

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