TransCanada Awarded US$181 Million Mexican Pipeline Project

abarrelfullabarrelfull wrote on 27 Feb 2012 07:20

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TransCanada Corporation (TransCanada) today announced it has been awarded a contract by Mexico's Comisión Federal de Electricidad (CFE) to construct, own and operate a natural gas pipeline in east-central Mexico. The 36-inch, 125-kilometre Tamazunchale Pipeline will extend from the facilities of Pemex Gas near Naranjos, Veracruz and transport natural gas under a long-term (26 year) contract with the CFE to an electricity generation station near Tamazunchale, San Luis Potosi. TransCanada expects to invest approximately US$181 million in the project.

The pipeline will be designed to transport initial volumes of 170 million cubic feet per day (mmcf/d). Under the contract, the capacity of the Tamazunchale Pipeline will be expanded beginning in 2009 to approximately 430 mmcf/d to meet the needs of two additional proposed power plants near Tamazunchale. TransCanada will immediately commence project and construction activities with a planned in-service date of December 1, 2006.

"We are pleased with the selection of our proposal for the Tamazunchale Pipeline as we view Mexico as part of the broader North American gas market," said Hal Kvisle, TransCanada's chief executive officer. "With our significant presence and expertise in North America, and our previous successes in Mexico, we have identified it as a market where we would have a competitive advantage in the natural gas transmission business. We will proceed in our usual disciplined manner when evaluating opportunities in Mexico." The CFE is planning to bring new natural gas-fired power plants online. As a result of this and other growth in natural gas demand, TransCanada expects the Mexican natural gas market, currently at six billion cubic feet per day, to grow to nine billion cubic feet per day by 2013 and provide additional opportunities for TransCanada to invest in that country.

TransCanada's pipeline expertise includes significant experience in Mexico. TransCanada was the project manager, operator and largest partner in the 700-kilometre Energia Mayakan natural gas pipeline project in Mexico's Yucatan peninsula - the first pipeline of its kind in Mexico to have been awarded to the private sector. TransCanada was also the project manager, operator and owner of the 200-kilometre El Bajio natural gas pipeline project. TransCanada sold its interests in these projects in 2000.

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