CFEnergia, the fuels marketing arm of Mexico’s state power utility, the Comision Federal de Electricidad (CFE), has secured a $100 million, 10-year contract to supply 22 MMcf/d of natural gas for a power plant to be built by a consortium of Emerging America and The Abraaj Group, a CFE spokesman told NGI.

The plant is to be built in Aquiles Serdan, a largely rural community in the northern border state of Chihuahua that has about 11,000 residents.

Emerging America develops projects in Mexico that involve real estate, energy and higher education. The Abraaj Group, based in Dubai, is a private investment fund that operates in growth markets of Africa, Asia, the Middle East, Latin America and Turkey.

The plant and the facility turbines are being built by Finland-based Wartsila under a $95 million contract. Installed capacity is slated as 100 MW; commercial operations are due to begin in late 2018.

The gas, to be supplied by the Permian Basin, which straddles West Texas and southeastern New Mexico, would be transported from the Waha hub to the border and from there to the Infraestructura Energetica Nova (IEnova) Ojinaga-El Encino pipe, whose route includes Aquiles Serdan.

IEnova, the Mexican unit of Sempra Energy, was awarded a $299 million contract from the CFE to build Ojinaga-El Encino three years ago. The pipe, now in commercial operation, has capacity of 1.35 MMcf/d.

The CFE and the state oil company, Petróleos Mexicanos (Pemex), have similar budgets for 2018, each for about 390 billion pesos (slightly more than $20 billion).

However, for CFE, the allocation for 2018 rose by 11.3% from 2017, while the Pemex budget was reduced by 4.6%, reflecting the relative commercial success of the power utility as its fuels marketing arm takes maximum advantage of the market openings approved by the 2013 energy reform. In addition to CFEnergia, the state utility has an offshoot that concentrates on imports: CFE Internacional, or CFEi.

In August, CFEnergia sealed a $240 million natural gas deal to supply the six Mexican plants of international steel-maker Arcelor-Mittal, whose base of operations is on the Pacific Coast port of Lazaro Cardenas, about 220 miles from the CFE’s liquefied natural gas import terminal at Manzanillo.

In September, CFEnergia signed a 24-year contract, valued at about $4 billion, to supply Spain’s Iberdrola, the leading private-sector power generator in Mexico. The gas is to supply Iberdrola’s El Carmen 866 MW power plant, which is under construction at an estimated investment cost of $450 million.

El Carmen is a municipality within the metropolitan area of Monterrey, capital of the northern state of Nuevo Leon and regarded as the industrial hub of the nation’s private sector.