By Thomas Black and Valerie Rota
Sept. 10 (Bloomberg) -- Petroleos Mexicanos, the country's state oil monopoly, said saboteurs blew up three oil and gas pipelines in the energy hub of Veracruz state, marking the third terrorist strike on its distribution network since July.
The six explosions that shut down lines carrying crude oil, natural gas and propane were ``premeditated acts,'' Pemex said in an e-mailed statement. About 12,500 people were evacuated after the blasts at 3 a.m. New York time, Veracruz Governor Fidel Herrera said on Mexico City-based Radio Formula. Pemex reported no injuries or damage outside its facilities.
``In today's democratic Mexico, there is no place for these criminal acts,'' President Felipe Calderon, traveling in India, said in a statement e-mailed by his office. ``Those who attack the security of the Mexican people under any pretext are attacking Mexico and democracy.''
Calderon, who took office in December, is grappling with the country's most serious security threat since a guerilla uprising in 1994 led to rebel seizure of the tourist town of San Cristobal de las Casas. Unchecked, guerrilla attacks on energy infrastructure could undermine his plans to quicken economic growth with higher government spending on development projects.
`Main Arteries'
The blasts today follow two separate pipeline bombings in July that disrupted natural gas for thousands of residents and businesses in four central states. The damage to industrial production from this attack may be greater because it affects a larger gas pipeline and lines that connect to Mexico City and Guadalajara, the country's second-largest city, said David Shields, an independent energy analyst in Mexico City.
``These pipelines are the main arteries of supply to Mexico City and the surrounding areas,'' Shields said.
Vitro SAB, Mexico's biggest glassmaker, halted production at five glass factories as gas supplies were cut to Vitro's plants in Mexico City, Toluca, Queretaro and Guadalajara, the company said in a statement. Grupo Industrial Saltillo SAB, the Saltillo- based producer of auto parts and construction materials, had to shut three ceramic-tile plants in the states of Guanajuato and San Luis Potosi because of a lack of natural gas.
Vitro's shares fell for a second day, dropping 78 centavos, or 2.9 percent, to 25.92 pesos. Grupo Industrial Saltillo rose 20 centavos to 18.4 pesos. Mexico's Bolsa index of the 35 most- traded stocks declined 1.2 percent to 29,893.18 after falling 1.8 percent on Sept. 7.
The explosions caused natural gas for October delivery to rise, said Michael Rose, trading director at Angus Jackson Inc. in Fort Lauderdale, Florida. The price climbed 39 cents, or 7.1 percent, to $5.891 per million British thermal units on the New York Mercantile Exchange. The price earlier touched $5.976.
Guerrillas
``The market is on edge, everybody is short and whenever anything happens we'll go up,'' Rose said.
Pemex is the only supplier of natural gas under Mexican law. The company, which generates tax revenue equal to almost 40 percent of federal spending, will require manpower and funds to repair the damage at a time it's struggling to slow a decline in oil production that began in 2004. During the first seven months of this year, Pemex produced an average of 3.16 million barrels per day, down from 3.38 million barrels in 2004.
A guerrilla group that calls itself the Popular Revolutionary Army claimed responsibility for the blasts on July 5 and July 10. No one has taken responsibility for today's attacks.
The group, operating in Oaxaca and other southern states, demanded the government release two of its members, whom the Interior Ministry denied having in custody.
Distribution
The group first surfaced in Oaxaca and Guerrero states two years after the 1994 uprising in Chiapas by the Zapatista Army for National Liberation, an armed group demanding indigenous rights. The EPR has shown itself to be more violent than the Zapatistas, who avoided conflict with Mexican authorities after their initial uprising.
Three of the blasts occurred in different areas of a 48-inch natural-gas pipeline that originates at Pemex's Cactus plant and goes to San Fernando in the northern state of Tamaulipas, Pemex said.
The other three explosions damaged a gas line, a liquid- propane pipeline and a 30-inch oil pipeline. The 30-inch natural gas line connects Minatitlan to Mexico City. The 24-inch liquid natural gas line supplies Guadalajara.
Restoring Service
Pemex will take three to five days to repair the damage and restore natural-gas service, said Carlos Ramirez, a Pemex spokesman, in an e-mail. The blasts cut off supply of about a billion cubic feet per day, mostly to businesses, he said.
Pemex said natural-gas supply will be the most affected by today's blast. Local supplies of propane and gasoline would be met, the company said.
The explosions on July 10 cut natural gas service to four states and caused more than 100 large companies to reduce or suspend production for a lack of gas.
The explosions today will have an even greater impact because they have cut supplies to more businesses across a larger region of central and western Mexico, said the Confederation of Industrial Chambers, an umbrella industrial trade group.
``It's a concern that these incidents, which seriously affect the operations of a strategic supply such as Pemex, are repeated even after the preventive measures the government put into place after the July event.''
Following the Pemex blasts in July, President Calderon deployed 5,000 troops from an elite military unit to safeguard Pemex's facilities as well as dams and power plants. Pemex stepped up aerial surveillance of its 60,000-kilometer pipeline system.
The company's pipeline network is too extensive to patrol completely, Shields said.
``If terrorists have decided they're going to blow up Pemex pipelines, then it's going to be very hard to stop,'' he said. ``There was a time in Colombia that this would happen every week.''
To contact the reporters on this story: Valerie Rota in Mexico City at vrota1@bloomberg.net; Thomas Black in Monterrey at tblack@bloomberg.net.
Last Updated: September 10, 2007 20:09 EDT
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