Mexico's Guaymas-El Oro natural gas pipeline waiting on court to resume operation: sources

Houston (Platts)--8 Mar 2018 1252 pm EST/1752 GMT

IEnova's Guaymas-El Oro natural gas pipeline in Northwestern Mexico will remain out of operation for an indefinite period while a federal district court weighs the merits of a demand against the project from a local indigenous group, sources said.

The Seventh District Court of Ciudad Obregon on March 2 refused a legal motion from Mexico's Energy Secretariat, referred to as SENER, to lift a temporary injunction against the repair of damage to the pipeline that was caused by the indigenous group.

The 510 MMcf/d pipeline was completed in April 2017 by IEnova amid a temporary injunction that prevents the company from working on Yaqui territory. In April 2016, the court imposed a temporary injunction on the construction of the project until it finished hearing the complaint from the Yaqui tribe of Lomas de Bacum against the project.

However, it was not clear from the injunction whether it prevented the company from building only at Bacum or the whole Yaqui territory where other tribes also live, a source within IEnova said.

The project had the support of seven other area tribes, as well as SENER. Bacum's opposition was not seen as a deterrent to construction by SENER, and IEnova proceeded to build the pipeline through 90 kilometers of Yaqui territory, avoiding the Bacum area because of the injunction, according to the IEnova source. Shortly after the pipeline was completed, and gas began flowing in April 2017, Bacum Yaquis damaged the pipeline as a form of protest against IEnova for completing the project.

Bacum considers IEnova to be in contempt of the ongoing legal process, Rodrigo Gutierrez, the Bacum's technical advisor, said in an interview.

The IEnova source said the company requested permission from the court to repair the pipeline.

However, the judge said the injunction prevents IEnova not only from building but also from repairing the pipeline across the whole Yaqui territory.

The defense appealed this decision to a circuit court unsuccessfully.

"IEnova is waiting for the district court to decide on the merits of the legal process and, consequently, reestablish the operation of the pipeline that was illegally vandalized and sabotaged by the Loma de Bacum representatives," IEnova said in an emaied statement.

A final resolution is expected in the coming months, both the plaintiff and the defendants said. Both groups declined to say when the pipeline could be once again operational.

However, if any of the parties is unhappy with the outcome, they could appeal the final resolution at a federal circuit court, further delaying repairs, Gonzalez said.

The Bacum prefer IEnova to move the pipeline to an alternate 150-kilometer route outside Yaqui territory. However, sources have said this is not viable as the pipeline is already installed in Yaqui territory.

Gonzalez said the Bacum is open to the project staying in Yaqui territory. "We aren't against the pipeline or progress. We only want security for the people and just payment for their lands," Gonzalez said. --Daniel Rodriquez,

--Edited by Derek Sands,

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