Mexican state-run utility CFE has canceled its auction to bring natural gas into the Pacific state of Baja California Sur, the company said.
CFE said the gas project isn’t necessary as its new underwater transmission line project will fulfill the electricity needs of the state.
“By opting for this alternative to strengthen the reliability of the Baja California Sur electrical system, CFE will no longer continue with the auction for the provision of natural gas transportation to the entity,” it said in a statement Thursday.
The $600 million natural gas project would have provided up to 227 MMcf/d of fuel to transform CFE’s fuel oil generation fleet in Baja California Sur, according to CFE’s auction documents.
The $1 billion underwater transmission line will cross the Sea of Cortez, connecting Bahia de Kino, Sonora, and Infernito, Baja California Sur, according to Mexico’s Energy Secretariat (SENER) National Electric System Development Program (PRODESEN) 2017-2031.
The transmission line is expected to be operational by 2022, and it will connect the state with the rest of the country for the first time through a 105-km, 400 kV underwater direct transmission cable.
The underwater transmission line will connect the state with CFE’s growing combined-cycle natural gas plant fleet in the states of Sonora and Sinaloa, thus displacing expensive diesel- and fuel oil-generated power in Baja California Sur.