TransCanada Corp. (TSX: TRP)(NYSE: TRP) has been chosen to build, own, and operate the Tuxpan-Tula Pipeline in Mexico. Construction of the pipeline is supported by a 25-year natural gas transportation service contract with the Comisión Federal de Electricidad (CFE), Mexico's state-owned power company.
"The Tuxpan-Tula Pipeline demonstrates our continued commitment to developing Mexico's energy infrastructure to meet the need for increased natural gas supply," said Russ Girling, TransCanada's president and CEO.
TransCanada expects to invest US$500 million in the 36-in.-diameter pipeline and anticipates an in-service date in the fourth quarter of 2017. The pipeline will be 250 kilometers (155 miles) long and have contracted capacity of 886 million cubic feet a day (MMcf/d).
The pipeline will originate in Tuxpan in the state of Veracruz and extend through the states of Puebla and Hidalgo, supplying natural gas to CFE combined-cycle power-generating facilities in each of those jurisdictions, as well as to the central and western regions of Mexico. The pipeline will serve new power-generation facilities and those currently operating with fuel oil which will be converted to use natural gas as their base fuel. Construction is expected to start in 2016.
The Tuxpan Tula Pipeline will complement TransCanada's business in Mexico. Today, TransCanada also owns and operates the Tamazunchale and Guadalajara pipeline systems and is completing construction of the Topolobampo and Mazatlán pipelines. By 2018, with the Tuxpan-Tula Pipeline, TransCanada will have five pipeline systems, with approximately US$3 billion invested in Mexico.