GE Energy Wins Inspection Contract for Mexican Pipeline

GE Energy has received a multimillion dollar, six-year contract to provide maintenance and inspection services for the new San Fernando Pipeline in northeastern Mexico.

Pipeline owner Gasoductos de Tamaulipas awarded GE Energy the contract to handle all related inspection and maintenance work on the 120-kilometer natural gas pipeline in the Mexican state of Tamaulipas. Gasoductos de Tamaulipas is a special purpose company formed by Pemex Gas y Petroquimica Basica of Mexico (PGPB) and El Paso Energy of the United States.

The 36-inch pipeline, built by the prime (EPC) contractor Techint Mexico, is located between Los Indios and San Fernando. The contract also covers two new compression stations erected at Los Indios and El Caracol for the project.

The San Fernando Pipeline, which connects existing Pemex pipeline assets in Tamaulipas, will carry one billion cubic feet of gas daily and increase Mexico's gas transportation system capacity significantly. The new pipeline will initially use gas from the United States but ultimately will carry gas from the onshore Burgos Basin gas fields.

GE Energy was selected because it offers the customer several advantages, including the lowest amount of down-time for system maintenance; a single service provider with only one point of contact; lower maintenance costs guaranteed by tying them to the long-term service agreement; and a complete, long-term pipeline integrity plan.

GE Energy will provide all equipment and personnel for the work that includes an integrity and quality audit, a cleaning evaluation, cleaning runs, a baseline inspection and re-inspections when necessary. The contract also includes a RunCom (reinspection) analysis, satellite imaging, assessment workshops, pipeline integrity plan document, the creation and maintenance of a pipeline database, risk assessments, an integrity management plan and programs, and consultancy work.

GE Energy will also initiate a defect assessment repair plan, an emergency response plan and failure investigations when required. Since the San Fernando Pipeline is a new system, GE Energy's first task will be to initiate a baseline inspection during the second quarter of 2004. Pipeline integrity management and other related work was scheduled to begin in June 2004.

GE Energy's oil and gas business began its compression station maintenance services program in March 2004. All other work will be done on a "call-out" basis.

The pipeline inspection and maintenance contract is GE Energy's latest involvement in the project. The company also provided the pipeline's builder, Techint, with six gas turbine-driven turbo compression trains for the two compression stations.

This is GE Energy's first direct contract with Gasoductos de Tamaulipas, but PGPB, El Paso and Techint are each long-term GE customers. Through a subsidiary, GE Energy has been a pipeline integrity and inspection leader in Mexico since the 1980s.

PGPB, which will operate the pipeline, is a unit of Pemex, Mexico's state-owned oil and gas company responsible for all natural gas, liquid petroleum and petrochemical projects in Mexico. As the pipeline operator, PGPB will handle maintenance work not included in GE Energy's contract. El Paso Energy is a leading provider of natural gas services and the largest pipeline company in North America. The company has core businesses in pipelines, production and midstream services.

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