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TransCanada-Sempra JV Gets Latest Mexico NatGas Pipeline Contract

Infraestructura Marina del Golfo (IMG) -- a joint venture of TransCanada Corp. and Sempra Energy Mexico unit IEnova -- has been chosen to construct own and operate the US$2.1 billion Sur de Texas-Tuxpan natural gas pipeline in Mexico.

The project is to be supported by a 25-year natural gas transportation service contract for 2.6 Bcf/d with Mexico's Comision Federal de Electricidad (CFE). TransCanada will develop, operate and own 60% of the project, with IEnova owning 40%.

"This new project brings our footprint of existing assets and projects in development in Mexico to more than US$5 billion, all underpinned by 25-year agreements with Mexico's state power company," said TransCanada CEO Russ Girling.

TransCanada expects to invest US$1.3 billion in the partnership to construct the 42-inch diameter, 497-mile pipeline and anticipates an in-service date of October 2018. The pipeline will begin offshore in the Gulf of Mexico, at the border point near Brownsville, TX, and end in Tuxpan, in the state of Veracruz.

The pipeline will supply gas to CFE power plants in the states of Tamaulipas and Veracruz and serve the eastern, central and western regions of Mexico. In addition to a connection with CENAGAS's pipeline system in Altamira, the project will interconnect with TransCanada's Tamazunchale (see Daily GPIJune 20, 2005) and Tuxpan-Tula (see Daily GPINov. 11, 2015) pipelines as well as with other transporters in the region.

According to a project data sheet, CFE had estimated the project cost at more than US$4.5 billion, but the IMG bid was about 52% below that estimate at just over US$2.16 billion, CFE said Monday.

In Mexico during the last eight months, TransCanada has been awarded contracts for the Tuxpan-Tula and the Tula-Villa de Reyes (see Daily GPIApril 11) pipelines. Construction of these two projects is in progress with in-service expected during 2018.

IEnova recently won a bid to construct the Ramal Empalme pipeline in the Mexican state of Sonora (seeDaily GPI, May 6). This followed IEnova's loss to TransCanada in the contest to construct the Tula-Villa de Reyespipeline (see Daily GPI, April 14).

Since 2014 to date, CFE has completed 14 competitive bid processes for pipelines, awarding contracts to seven different companies, CFE said. CFE is the anchor shipper on these pipelines, but the private sector is able to reserve transportation capacity, making the systems open access.

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