TransCanada and Sempra Energy Joint Venture Awarded $2.1 Billion Natural Gas Pipeline Project in Mexico

TransCanada announced Monday that its joint venture with Sempra Energy’s subsidiary IEnova has been selected by Mexico’s state-owned power company Comisión Federal de Electricidad (CFE) to build, own, and operate the $2.1 billion Sur de Texas-Tuxpan natural gas pipeline in Mexico.

The pipeline project will be supported by a 25-year natural gas transportation service contract for 2.6 billion cubic feet per day with CFE. TransCanada will develop, own, and operate 60 percent and IEnova will own 40 percent.

"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 TransCanada's president and chief executive officer Russ Girling. "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."

The pipeline will start in Brownsville, Texas and end in Tuxpan, Veracruz, Mexico. TransCanada will invest approximately $1.3 billion in the partnership to construct the 42-inch diameter, 497-mile pipeline. They estimate it will go into service late 2018.

Source: TransCanada