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TransCanada inks deal to build US$550 million natural gas Tula - Villa de Reyes pipeline in Mexico

CFE, TransCanada ink a deal to build 420km pipeline from Tula, Hidalgo to Villa de Reyes, San Luis Potosi.
TransCanada inks deal to build US$550 million natural gas Tula - Villa de Reyes pipeline in Mexico

TransCanada Corp. signed a contract to build, own and operate the Tula - Villa de Reyes pipeline in Mexico.

Construction of the pipeline is supported by a 25-year natural gas transportation service contract for 886 MMcf/d with the Comisión Federal de Electricidad (CFE), Mexico's state-owned power company.

"The Tula - Villa de Reyes Pipeline complements our existing pipeline network in Mexico and furthers our strategy of owning and operating highly contracted and regulated assets that generate stable and predictable earnings and cash flow streams," said Russ Girling, TransCanada's president and CEO.

TransCanada expects to invest approximately US$550 million in the 36in diameter, 420km (261mi) pipeline and anticipates an in-service date of early 2018. The pipeline will begin in Tula in the state of Hidalgo, and terminate in Villa de Reyes, in the state of San Luis Potosí, transporting natural gas to power generation facilities in the Central region of the country. The project will interconnect with TransCanada's Tamazunchale and Tuxpan - Tula pipelines as well as with other transporters in the region.

The Tula - Villa de Reyes Pipeline is the most recent addition to TransCanada's expanding portfolio in Mexico. TransCanada was awarded the Tuxpan - Tula pipeline in November 2015. By 2018, TransCanada will be operating six major natural gas pipeline systems in Mexico representing an overall investment of approximately $3.6 billion.

Image from TransCanada.

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