Mexico Awards TransCanada with Natural Gas Pipeline Projects

Mexico moves closer to its natural gas-fired generating capacity goals as it awards TransCanada with contracts to build two new gas pipelines.
Published: Thu 08 Nov 2012

What happened                                                                         

Mexico’s federal power company, Comision Federal de Electricidad (CFE) has awarded Calgary-based Transcanada with contracts for two sections of the north-west natural gas pipeline system, El Encino-Topolobampo and El Oro-Mazatlán.

Transcanada’s Mexican subsidiary Transportadora de Gas Natural del Noroeste will build, own and operate the two new pipelines. Both projects are supported by 25-year natural gas transportation service contracts with CFE.

Background          

Transcanada expects to invest over US$1bn in the Topolobampo Pipeline project. The 30-inch diameter pipeline will be approximately 530km (329 miles) long and have a contracted capacity of 670m cubic feet per day.The Topolobampo Pipeline begins in El Encino, in the state of Chihuahua, and ends in Topolobampo, in the state of Sinaloa. The line interconnects with other pipelines that are expected to be built. El Encino-Topolobampo will supply thermo plants Topolobampo II and III once they finish construction in 2016 and 2017, respectively. These projects, each with 700MW capacity, will be tendered by CFE in 2013.

The El Oro-Mazatlán stretch, near the west coast, will supply the the 450MW Mazatlán thermo and future Mazatlán combined cycle plant. This section is 364km, 24-inches and has a contracted capacity of 202 million cubic feet per day, costing US$405m. Construction will be completed by 2016.  The Mazatlan pipeline will connect with the US$1bn Topolobampo pipeline.

TransCanada has already built and is operating the Guadalajara and Tamazunchale pipelines. The firm is about to start on the Tamazunchale Pipeline Extension.

The El Encino-Topolobampo falls under the Mexican’s government to expand the nation's electrical grid and generating capacity. Much of this generation will be natural gas-fired. The government plans to spend US$8bn to expand the country's 5,500-mile natural gas pipeline system, focusing on central and northern industrial cities.

Last Word                                                                                                                            

Mexico’s significant untapped natural gas reserves, if properly developed, could eventually provide Mexico with energy independence.

Sources               

BNAmericas-Transcanada wins two natural gas pipeline contracts-Mexico

Chron-Multibillion-dollar pipeline expansion in Mexico means money for Texas

Edmonton Journal-TransCanada awarded new $400M Mexican pipeline contract, follows earlier $1B win

Equities.com-TransCanada wins contract to build natural gas pipeline in Mexico

My San Antonio-Natural gas from Mexico beckons Texas companies

Oil Price-Mexico-Rising Natural Gas Superstate?

The Gazette-TransCanada wins $400-million pipeline contract in Mexico

The Globe and Mail-TransCanada gains second Mexican gas pipeline in a week

Times Colonist-TransCanada wins second pipeline deal in Mexico