New Mexico Gas Co. plans to seek a federal permit for an extension of its pipeline system to enable exports of natural gas to Mexico. It would be the state’s first such pipeline.

The project is expected to cost about $5 million and be completed within a year. Cost for the pipeline would be borne by shareholders, not ratepayers, the utility said, according to a report in the Albuquerque Journal.

New Mexico Gas would extend its existing pipeline in Santa Teresa by about five miles to the Mexican border. Exports would require the construction of additional facilities on the Mexican side of the border. A New Mexico Gas spokesman did not immediately respond to a request for more details on the project.

Based in Albuquerque, New Mexico Gas is the largest utility in the state and is located between two large natural gas production basins. The utility’s service area covers 6,501 square miles with operations in 23 of the 33 counties in the state and reaches 60% of the population of New Mexico. The company maintains 12,000 miles of natural gas pipeline to provide service to more than 513,000 residential, commercial and transportation customers.

At the beginning of July, Nova Scotia-based Emera Inc. closed its $6.5 billion acquisition of New Mexico Gas parent TECO Energy Inc. New Mexico Gas agreed to construct the pipeline to the Mexican border in a settlement agreement with the New Mexico Public Regulation Commission related to the Emera acquisition. New Mexico Gas was acquired by TECO in 2013 (see Daily GPI, June 3, 2013).

As it transitions to a competitive natural gas market, Mexico is an increasingly attractive destination for gas from the United States. Learn more in NGI’s just-released Special Report, Mexico: A Whole New Natural Gas Market Opening Close to Home.