TransCanada’s joint venture wins $2.1b natgas pipeline in Mexico

TransCanada’s joint venture wins $2.1b natgas pipeline in Mexico

TransCanada Corporation (NYSE:TRP) has announced that its joint venture with IEnova and Infraestructura Marina del Golfo (IMG) will build, own and operate the US$2.1 billion Sur de Texas-Tuxpan natural gas pipeline in Mexico.

The project will be backed by a 25-year natural gas transportation service contract for 2.6 billion cubic feet a day with Mexico’s state-owned power company, Comisión Federal de Electricidad (CFE).

“We are extremely pleased to further our growth plans in Mexico with one of the most important natural gas infrastructure projects for that country’s future,” said Russ Girling, TransCanada’s president and CEO. “This new project brings our footprint of existing assets and projects in development in Mexico to more than $5 billion, all underpinned by 25-year agreements with Mexico’s state power company.”

TransCanada will develop, operate and own 60 per cent of the project and IEnova will own 40 per cent.

TransCanada aims to invest approximately $1.3 billion to construct the 42-inch diameter, 800km pipeline and expects an in-service date to be late 2018.

The pipeline will start offshore in the Gulf of Mexico, at the border point near Brownsville, Texas and end in Tuxplan, Veracruz in Mexico.

The pipeline will interconnect with CENAGAS’s pipeline system in Altamira and TransCanada’s Tamazunchale and Tuxpan-Tula pipelines in addition to other transporters.

TransCanada was recently awarded two other projects, the Tuxpan-Tula and the Tula-Villa de Reyes pipelines. Their construction is already in progress and expects to achieve in-service dates of 2018.