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PALM DESERT, Calif., June 28, 2002 -- Penn Octane Corp., a supplier of LPG to Northeast Mexico, announced it is in discussions with foreign companies to develop, build and/or supply a cogeneration plant with a capacity of up to 200 MW.
The plant is anticipated to be located near the company's terminal facilities in Matamoros, Mexico. The power plant would be fueled by natural gas supplied from Brownsville, Texas and delivered through the company's second cross border pipeline, that is currently idle.
"We are excited about the possibility to employ our second pipeline in such a lucrative opportunity," said J.B. Richter, President and CEO of Penn Octane. "The need for electricity in Mexico is enormous and the pipeline is ideally positioned to enable us to enter this lucrative market. A comprehensive study is currently underway and we believe that an agreement could be reached with one of these partner companies as early as September 2002."
The revenue from the cogeneration plant would compliment the company's current LPG operations in Northeastern Mexico. The company recently reported record third quarter financial results for the period ended April 30, 2002.
Penn Octane is a supplier of Liquefied Petroleum Gas to Mexico. Penn Octane leases a 132-mile, six-inch pipeline which connects from a pipeline in Kleberg County, Texas to its terminal in Brownsville, Texas, which historically served as a trans-shipment point for truck delivery to Mexico.
The company owns a 21 mile pipeline which connects the terminal in Brownsville to a storage and distribution terminal in Matamoros, Tamaulipas and Saltillo, Mexico which is operated by its Mexican affiliate, Tergas, S.A. de C.V.
The company also utilizes a twelve-inch propane pipeline which connects certain gas plants in Corpus Christi, Texas to its pipeline in Kleberg County. The company's network is further enhanced due to the 155 miles of pipeline it has rights to use to transport LPG to and from its storage facility of 500,000 barrels in Markham, TX and an additional 200,000 barrels of storage in MT BELVIEU, TX which enhances the Company's ability to bring LPG to Northeastern Mexico.
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