Spain's Telvent to Modernize Gas Natural's 15,229-Kilometer Mexican Distribution Network

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Researched by Industrial Info Resources (Sugar Land, Texas)--Information technology (IT) solutions provider Telvent Git S.A. (NASDAQ:TLVT) (Madrid, Spain) secured a contract from Gas Natural Mexico SA de CV (Mexico City), the local subsidiary of Gas Natural SDG S.A. (MCE:GAS) (Barcelona, Spain), to deliver a turnkey technological solution to modernize the latter's 15,229-kilometer natural gas distribution network.

In an effort to increase the efficiency and security of gas supplies to its 1.25 million residential and industrial customers in 38 Mexican municipalities, Gas Natural plans to equip its extensive distribution network with advanced control and information management systems. Field information will be integrated with the firm's enterprise management systems on a real-time basis and enable optimization of processes such as billing and inventory management.

Under the contract, Telvent will upgrade the supervisory control and data acquisition (SCADA) system with its OASyS solution and ensure smooth integration without any unplanned outages. Telvent also will provide maintenance services for the system, which is expected to address Gas Natural's current and future requirements. Telvent also has supplied automation and control systems for Gas Natural's distribution networks in Colombia and Spain.

Telvent provides information technology solutions and services in the agricultural, energy, environmental and transportation sectors. The firm claims to have provided automated control and information management solutions for more than 60% of the total hydrocarbons transported in North and Latin American pipelines. Its suite of applications for the gas sector provides various functionalities such as collection of measurement data from multiple pipelines through disparate SCADA systems; gas quality management; real-time monitoring of pipeline operations; and measurement and analysis of gas flows.

During the past two months, Telvent secured several contracts to supply its OASyS SCADA system for modernizing various gas distribution networks, including the Sichuan-East gas pipeline extension of China Petroleum & Chemical Corporation (NYSE:SNP) (Sinopec) (Beijing, China), the Dampier-to-Bunbury natural gas pipeline in Western Australia, and Phase II of the West-East gas pipeline in China. In October 2009, the firm announced that it had successfully integrated its SCADA system with the 14,000-kilometer gas pipeline network of Istanbul Gas Distribution Corporation (IGDAS AS) (Istanbul, Turkey), Turkey's largest distributor of natural gas.

The Gas Natural Group forayed into Mexico in 1994 through the distribution of natural gas to domestic, commercial and industrial customers in the city of Nuevo Laredo. In 2007, it won an international tender announced by Electricite de France S.A. (EPA:EDF) (Paris, France) and acquired a 54-kilometer natural gas pipeline and five combined-cycle power plants, with a total installed power generation capacity of 2,233 MW in the country, for 1.02 billion euros. With this transaction, the group was positioned as the leading private energy operator and the second-largest electric power operator in Mexico. However, in December last year, the group signed an agreement with Mitsui & Company Limited (NASDAQ:MITSY) (Tokyo, Japan) and Tokyo Gas Company Limited (PINK:TKGSY) (Tokyo) to sell a 76% stake of its power generation assets in Mexico for $1.23 billion. This move is part of the firm's 3.6 billion euros disinvestment plan aimed at reducing the debt of 22 billion euros it incurred following its acquisition of Union Fenosa S.A. (Madrid, Spain). Gas Natural will retain about 1,570 MW of power generation capacity in Mexico, with an additional capacity of 500 MW scheduled for commissioning in early 2010.

In November 2007, the firm announced plans to augment its gas distribution network in Latin America by 24%, increasing its customer base from 5.5 million to 6.2 million, as part of its strategic growth plan for 2008-12.

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