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BACKGROUND: Mirage Energy reaches funding deal for planned Texas-Mexico gas system




Mirage Energy Corp. struck a deal that would provide funding for its proposed Concho/Progreso pipeline and natural gas storage facility, which would deliver gas supplies from Texas across the border to Mexico’s national pipeline grid.

The memorandum of understanding with French company Organization Mondiale de Development, or OMD, outlines the terms of funding and participation in the project. The agreement would become binding once a “good will deposit” of $15 million is paid to Mirage, according to a March 27 news release.

Under the agreement, Mirage would sell all of its participation interest in the project to OMD, while OMD would provide the estimated $1.2 billion needed to fund the project. OMD would have the option to offer Mirage a 5% carried equity participation interest. If Mirage takes the offer, OMD would pay the company $16 million.

The funding would be composed of eight tranches of $150 million, each payable at 30-day intervals beginning April 15. If the deal does not close because of Mirage, it would refund the goodwill deposit. If the deal fails because of OMD, Mirage may keep a part of the deposit that would not exceed $10 million.

The project is composed of the planned Brazil gas storage field in Tamaulipas, Mexico, and a 42-inch-diameter bidirectional pipeline system with four sections. The sections are the 46.2-mile Concho extension that would run from the Banquette/Agua Dulce area to Falfurrias, Texas; the 93.9-mile Concho line that would connect the Concho extension to an international crossing at the U.S.-Mexico border near Progreso, Texas; the 36-mile Progreso pipeline that would run from the crossing to Centro Nacional de Control del Gas Natural Station 19 in Mexico; and the 67-mile Progreso II extension that would run from the station to the Los Ramones interconnect on Mexico’s national pipeline grid.

Mirage may also build a 14-mile bidirectional pipeline called the storage line that would connect the Progreso international crossing to the Brazil field.

The company is scheduled to begin final development April 1. It expects to receive U.S. and Mexico regulatory permits in the third quarter.