TransCanada Corporation (TSE:TRP, Mkt cap 38.92B, P/E – , Div/yield 0.56/4.10, EPS -1.94, Shares 702.51M) said on Monday that it has won a contract to build, own and operate a natural gas pipeline in Mexico in partnership with local energy infrastructure firm IEnova, a subsidiary of Sempra Energy.
The two companies will build, own and operate the US$2.1bn Sur de Texas-Tuxpan pipeline through their joint venture, Infraestructura Marina del Golfo (IMG).
TransCanada will develop, operate and own 60% of the project, with IEnova owning the remaining 40%.
Mexico’s state-owned power company, the Comisión Federal de Electricidad (CFE), has agreed a 25-year natural gas transportation service contract with IMG for 2.6 billion cubic feet per day.
“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,” commented 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 US$5bn, all underpinned by 25-year agreements with Mexico’s state power company.”
TransCanada expects to invest around US$1.3bn to construct the 42-inch diameter, approximately 800-kilometer (497-mile) pipeline.
Expected to start operating in late 2018, the pipeline will extend from offshore in the Gulf of Mexico, at the border point near Brownsville, Texas, through to Tuxpan, in the state of Veracruz.
The project is planned to connect with TransCanada’s Tamazunchale and Tuxpan-Tula pipelines, as well as CENAGAS’s pipeline system in Altamira and other transporters in the region.
TransCanada was awarded the Tuxpan-Tula and the Tula-Villa de Reyes pipelines in Mexico in the last eight months. Construction activities for these two projects are already in progress, with in-service dates scheduled for 2018.
TransCanada Corporation (TSE:TRP) is a Canadian energy infrastructure company with head offices in Calgary, Alberta. The Company operates through three segments: Natural Gas Pipelines, Liquids Pipelines and Energy. Natural Gas Pipelines and Liquids Pipelines consist of its respective natural gas and liquids pipelines in Canada, the United States and Mexico, as well as its regulated natural gas storage operations in the United States. Its natural gas pipeline network transports natural gas to local distribution companies, power generation facilities and other businesses across Canada, the United States and Mexico. Its existing liquids pipeline infrastructure connects Alberta and the United States crude oil supplies to the United States refining markets in Illinois, Oklahoma and Texas, as well as connecting the United States crude oil supplies from the Cushing, Oklahoma hub to refining markets in the United States Gulf Coast. Energy includes its power operations and the non-regulated natural gas storage business in Canada. More from Reuters »
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