Howard Midstream Energy Partners LLC’s (HEP) Nueva Era Pipeline LLC has closed on $353.3 million in project financing for the construction of the Nueva Era pipeline, a 50-50 joint venture between HEP and Mexico-based energy and services firm Grupo CLISA.

The Nueva Era pipeline will connect HEP’s existing Webb County Hub in South Texas directly to Monterrey, Nuevo León, Mexico. Banks that provided financing include MUFG, Santander, Societe Generale, Sumitomo Mitsui Banking Corp., and CaixaBank.

Construction activities began earlier this year on the 200-mile, 36- and 30-inch diameter pipeline, which will provide transportation for about 600 MMcf/d of natural gas (expandable to 900 MMcf/d), connecting producers in South Texas directly with end-users in northern Mexico.

Mexico’s Comision Federal de Electricidad is the Nueva Era anchor shipper, having committed to transport 504 MMcf/d for a 25-year term to help fuel combined-cycle power plants in Escobedo and Huinalá, near Monterrey. Nueva Era also offers transportation services to private shippers on an open access basis. The project is expected to be completed and in service in the second half of 2017.

“The closing and funding of project financing for Nueva Era marks a significant milestone for us as we continue on schedule with construction of the project,” said HEP CFO Scott Archer. “…[O]ur overall goal remains to provide northern Mexico’s industrial centers with access to competitively-priced natural gas, while providing South Texas producers direct access to new and emerging markets.”

Last summer the Alberta government’s investment arm said it had agreed to purchase a $500 million stake in San Antonio-based Howard Energy Partners LLC.

“We’ve been on this journey since about 2012 in anticipation of energy reform coming [to Mexico],” HEP CEO Mike Howard told NGI last year. “Obviously, the thing that gets all the press is the electrical generation market. That’s what obviously is the largest driver, like in the U.S., but there’s a lot of other industries, whether it be steel manufacturing, car manufacturing, cement plants. A lot of foreign investment is coming to Mexico to set up natural gas usage because of their position close to the U.S. and access to natural gas and the new pipelines going in.”

For more on natural gas infrastructure and market development in Mexico, check out NGI‘s recent webinar: Mexico Natural Gas Infrastructure — Drill Down Into the Market of Tomorrow With the Leaders Who Will Shape It.