TransCanada Corporation said it will invest $500m to extend the Tamazunchale Pipeline in Mexico.
The company will build, own and operate the 235km pipeline with a capacity of 630 million cubic feet a day (MMCf/d).
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TransCanada president and CEO Russ Girling said the Tamazunchale Pipeline Extension demonstrates the company’s continued commitment to develop Mexico’s energy infrastructure to meet growing requirements for increased natural gas supply.
"The pipeline represents one of the many low-risk energy infrastructure opportunities within our existing business lines that are continuously being developed by our company to help deliver long-term shareholder value," Girling added.
The Tamazunchale Pipeline construction is backed by a 25-year natural gas transportation service contract with the Mexico’s state-owned power company Comision Federal de Electricidad (CFE).
The scope of work will involve extension of the pipeline from the terminus of TransCanada’s existing Tamazunchale Pipeline in San Luis Potosi state and extending it through the states of Hidalgo and Queretaro.
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By GlobalDataThe pipeline will also be connected with Mexico’s National Pipeline System and serve a CFE combined-cycle power generating facility near El Sauz, Queretaro.
It will have a combination of 30- and 36-inch-diameter pipe and 37 megawatts of installed compression, said the company.
The pipeline is expected to be operational in the first quarter of 2014.
TransCanada noted the Mexican government has recently unveiled massive natural gas infrastructure projects for the country, which will allow Mexico to meet growing demand, allowing access to natural gas as a replacement fuel for heavy oil.
TransCanada’s natural gas pipelines span more than 57,000km, covering all major gas supply basins in North America.
