TransCanada to build $2.1 billion gas pipeline in Mexico

Mon Jun 13, 2016 5:34pm EDT
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By Julie Gordon

(Reuters) - TransCanada Corp (TRP.TO: Quote) said it would build and operate a $2.1 billion natural gas pipeline in Mexico, as the Canadian company ramps up in the Latin American country at a time when its key projects closer to home are facing delays.

TransCanada said on Monday the Sur de Texas-Tuxpan pipeline project would be built through a joint venture with a unit of Sempra Energy (SRE.N: Quote) and be backed by a 25-year transportation service contract with Mexico's state-owned power company.

TransCanada, which will own a 60 percent stake in the 800 kilometer (497 mile) pipeline and be its operator, will invest $1.3 billion in the project. Sempra's unit IEnova will hold the remaining stake.

Spectra Energy Corp SE.N said on Monday its unit won a contract to build and operate a $1.5 billion natural gas pipeline in Texas, which would connect to the Sur de Texas-Tuxpan pipeline in Mexico.

The unit, Valley Crossing Pipeline LLC, will build and operate the 1 billion cubic feet per day pipeline originating at Nueces County, Texas and extending to Brownsville, Texas.

The Sur de Texas-Tuxpan pipeline, which is expected to be in service in late 2018, is the largest of three new Mexican projects recently announced by TransCanada.

Construction has already begun on the $500 million Tuxpan-Tula pipeline and the $550 million Tula-Villa de Reyes lines.

"This new project brings our footprint of existing assets and projects in development in Mexico to more than $5 billion," TransCanada Chief Executive Russ Girling said in a statement.   Continued...