Spanish utility Elecnor is prepping a sale process for its 50% stake in the Morelos gas pipeline, two sources have told Inframation.
Two sources briefed said that the Spanish company has mandated BBVA and a sale process could begin soon, without specifying a timeline.
Another Spanish utility company Enagás owns the other half of the pipeline’s equity. One of the sources briefed said that while Enagás likely has a right of first offer on the stake, they do not believe that they will exercise it.
The project, which had a capex of USD 274.3m, consists of a 30” diameter, 172km pipeline with a capacity of 337m cubic feet per day.
Elecnor received funding from Spanish Company Internationalisation Fund (FIEM), Banobras and Citi-Banamex before selling a 50% stake to Enagás in June 2012. The then consortium completed the project in December 2015.
The project received good news recently when the government won approval in a 23 and 24 February public referendum for the continued development of the 622MW, combined-cycle Huexca thermoelectric plant, which the Morelos gas pipeline would supply as part of its 25-year service contract with the country’s Federal Electricity Commission (CFE).
Local residents had criticized the thermoelectric project, owned by the CFE, over fears that the plant would contaminate water supplies.
Following the referendum, the government commissioned a study from international human rights organization UNESCO, which recommended that the CFE move the location of a water discharge point at the power plant to separate it from a wastewater treatment plant, according to comments reported in the local press from the head of the National Water Commission, Blanca Jiménez Cisneros.
The source briefed said that the project could also sell gas to two additional thermoelectric plants planned in the area; the open-cycle 94MW Valle de México I and the combined-cycle 455MW San Lorenzo plants.