Los Ramones Gás Pipeline Phase II Sur

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The Los Ramones Gás Pipeline Phase II Sur project envisaged the construction of a 287-km natural gás pipeline starting in the state of San Luis Potosí and passing through the states of Queretaro and Guanajuato. The pipeline was set to have a capacity of 1.42 billion cubic feet per day. In April 2014, the project was awarded by the Mexican state-owned company Pemex to TAG Pipelines Sur S. de R.L. de C.V., a partnership of Mexico Power and Gas Ventures (wholly-owned subsidiary of the French company GDF Suez), PMI Holdings and TAG Pipelines (both companies wholly-owned by Pemex). The contract lenght was established as 25 years of commercial operations. The investment in the project was estimated at US$ 1100 million. Financial closure was achieved in December 2014. Financing comprised a term facility, a standby facility, a VAT facility and a working capital facility, as well as interest-rate and currency hedge agreements. The US$ 884 million financing package was provided by an international consortium of banks and Mexico’s development banks Nafin and Banobras. The sponsors contributed US$ 216 million in equity. In April 2014, the EPC contract was granted to ICA Fluor, a partnership of the Mexican construction company ICA and the American company Fluor Corporation. Construction works started in August 2014, and commercial operations were expected to commence in 2016. In September 2015, PMI's 45% stake in the project company was sold to Blackrock and First Reserve for US$ 900 million.