U.S. natural gas exports to Mexico should double in the coming years as power sector demand there grows, El Paso Corp.'s (EP) chief executive said Thursday.

El Paso is poised to benefit from increased exports to Mexico as power generators turn to the fuel, which burns more cleanly than coal or oil, Douglas Foshee said during a conference call to discuss the company's first-quarter results.

The company expects to complete an expansion of its EPNG pipeline in Arizona to supply two new gas-fired power stations in the Mexican state of Sonora by 2013. The plants should add 185 million cubic feet a day of demand to the pipeline, increasing the Houston-based company's revenue by about $30 million a year.

"We expect to compete very favorably" in Mexico, Foshee said, adding that revenues from the EPNG pipeline have been hit by decreased demand in California and the Southwest following the recent recession.

Exports to Mexico should reach 2 billion cubic feet a day in the coming years as Mexican state-owned energy company Petroleos Mexicanos focuses on oil production and the U.S. remains awash in gas, said James Yardley, president of El Paso's pipeline unit.

The U.S. last year exported about 900 million cubic feet of gas a day by pipelines to Mexico, according to the Energy Information Administration, and Yardley said El Paso pipelines supplied about three-quarters of that total.

-By Matt Day, Dow Jones Newswires; 212-416-4986; matt.day@dowjones.com
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