Mexican conglomerate Grupo Carso SAB has signed a deal with state utility Comisión Federal de Electricidad (CFE) to build and operate a natural gas pipeline in the northwestern portion of the country.

The natural gas pipeline would run across the states of Sonora and Baja California for a distance of about 416 kilometers, or around 260 miles.

CFE previously said that the transport system would need a capacity of 600 MMcf/d and service would be under a levelized rate for 25 years. CFE would source the gas from the United States, using its capacity on both sides of the border.

Carso’s pipeline would supply natural gas to existing power plants in both Mexican states, as well as to the 641 MW González Ortega combined cycle plant planned for Mexicali, Baja California and the...