Canadian Utility Atco Signs MOU for Mexican Midstream Projects
Calgary-based Atco, already a participant in Mexico’s deregulated power sector, signed a memorandum of understanding (MOU) December 12 with a Monterrey, Mexico-based company that will see both companies work together to develop midstream opportunities in the country.
Atco and Cydsa S.A.B., a large mining and hydrocarbon storage company, said their initial focus will be on developing underground hydrocarbon storage in salt caverns and depleted reservoirs. In addition, they will pursue opportunities in gas gathering and processing, as well as natural gas liquids (NGL) extraction and fractionation.
“This MOU presents us with an opportunity to expand our integrated suite of products and services in a growing, strategic market,” said George Lidgett, Atco’s managing director, pipelines and liquids. “Our decades of experience developing customer-focused midstream and energy storage services, paired with Cydsa’s invaluable local expertise, should enable us to identify targeted opportunities for growth in Mexico.”
Cydsa, which has more than 50 years of experience developing business opportunities in Mexico, recently announced a partnership with state-owned Petroleos Mexicanos (Pemex) to develop salt caverns for hydrocarbon storage in the country. The company operates 20 subsidiaries in five business segments, including mining and exploration, salt for human consumption and industrial production, chemical products and coating materials.
Atco, which has 7,000 employees and $21bn in assets, is a diversified global corporation involved in several parts of the midstream sector. It entered the Mexican market in 2014, when it won a contract with the country’s state-owned utility to build a $50mn gas pipeline near the town of Tula in the state of Hidalgo.
That same year it won a contract, along with Mexican-based companies, to build an $820mn gas-fired cogeneration plant at Pemex’s Miguel Hidalgo refinery, located in that same state. That project will have a capacity of 450MW, expandable to 638MW and will be able to produce 1,247 metric tons of steam/hour.