Development of $1.3 billion ammonia plant in Mexico

Orrick’s Houston and Latin America teams are representing Gas y Petroquímica de Occidente, S.A. de C.V. (Mexico) and G2X Energy, Inc. (US), both subsidiaries of Switzerland-based Proman, in the development of a $1.3 billion ammonia plant in Mexico.

Proman is a leading engineering, procurement and construction group operating worldwide in the gas processing, petrochemical, steel, infrastructure and automotive sectors. The group has key competencies in engineering, feasibility studies, construction, project execution, procurement, marketing and management services.

As part of this representation Orrick helped Proman close a transaction with Mexico’s Comisión Federal de Electridad to arrange for the purchase, sale and transportation of low-cost natural gas from the United States to the plant in Mexico.

The transaction is a first-of-its-kind as Mexico undertakes a massive expansion of its natural gas pipeline system, which will triple the amount of gas pipeline capacity in the country and increase capacity by over 25 billion cubic feet per day.

Orrick’s involvement included helping structure and arrange the cross-border gas supply among four different counterparties, including agreements for the private sale of natural gas in Mexico, which – until the new Mexican energy reform – had not been permitted and for which there was little Mexican experience or precedent.

In addition to helping structure the gas supply contracts, Orrick also set up a gas marketing subsidiary for G2X in Mexico and advised on the various U.S. and Mexican federal and state regulatory issues in connection with the gas supply, which supported the project financing for the plant.

Orrick advised with a team led by George Humphrey (Picture), and including Rodrigo Dominguez, Giji John, Joel Zipp, Bob Sills, Nik Mathews, Harry Clark and Mike Rodgers.

 

Involved fees earner: George Humphrey – Orrick; Rodrigo Dominguez Sotomayor – Orrick; Giji John – Orrick; Joel Zipp – Orrick; Nikiforos Mathews – Orrick; Robert Sills – Orrick; Harry Clark – Orrick; Michael Rodgers – Orrick;

Law Firms: Orrick;

Clients: Gas y Petroquímica de Occidente, S.A. de C.V. (Mexico); G2X Energy, Inc.;

 

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Author: Ambrogio Visconti