Pemex Starts Work Repairing Pipelines

MEXICO CITY Sep 13, 2007 (Dow Jones Newswires)

Mexican state oil monopoly Petroleos Mexicanos said Tuesday that it has started work repairing pipelines that were hit by explosions, and expects to restore natural gas supplies beginning next Sunday.

The attacks on the pipelines early Monday, for which a leftist rebel group reportedly claimed responsibility, affected natural gas supplies to 10 states, shutting down thousands of factories, including major steel, glass and auto manufacturers.

Pemex said in a statement Tuesday night that it was about to extinguish the last of four fires caused by the six explosions that affected pipelines in the Gulf coast state of Veracruz.

The company said it was giving priority to a 48-inch natural gas pipeline that was damaged in several places, setting up bypasses that are expected to be in place by Saturday.

Pemex said it's also working to repair other oil and product pipelines damaged in the attacks. The company increased imports of liquefied petroleum gas, which in many cases can be a substitute for natural gas, and reiterated that its exports of crude oil haven't been affected.

The pipeline blasts have caused havoc with Mexican industry, forcing thousands of factories to shut down for lack of fuel.

The manufacturing industry chamber, Canacintra, said the gas outage affected more than 2,500 manufacturers, and estimated losses at $100 million a day.

The steel industry chamber said more than 60% of the country's production was halted as a result.

Pemex chief executive Jesus Reyes Heroles said Monday that the blasts led to the loss of 25% of the company's natural gas production.

Pemex produces more than 6 billion cubic feet a day of natural gas, but Mexico remains a net importer and gets most of the gas it imports from the U.S.

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