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TransCanada Will Build a $2.1 Billion Gas Pipeline in Mexico

Russ GirlingRuss Girling
TransCanada CEO Russ Girling.Photograph by Jeff McIntosh — AP

TransCanada said it would build and operate a $2.1 billion natural gas pipeline in Mexico, as the Canadian company ramps up in the Latin American country at a time when its key projects closer to home are facing delays.

TransCanada (TRP) said on Monday the Sur de Texas-Tuxpan pipeline project would be built through a joint venture with a unit of Sempra Energy (SRE) and be backed by a 25-year transportation service contract with Mexico’s state-owned power company.

TransCanada, which will own a 60% stake in the 497 mile pipeline and be its operator, will invest $1.3 billion in the project. Sempra’s unit IEnova will hold the remaining stake.

Spectra Energy (SE) said on Monday its unit won a contract to build and operate a $1.5 billion natural gas pipeline in Texas, which would connect to the Sur de Texas-Tuxpan pipeline in Mexico.

The unit, Valley Crossing Pipeline, will build and operate the 1 billion cubic feet per day pipeline originating at Nueces County, Texas and extending to Brownsville, Texas.


The Sur de Texas-Tuxpan pipeline, which is expected to be in service in late 2018, is the largest of three new Mexican projects recently announced by TransCanada.

Construction has already begun on the $500 million Tuxpan-Tula pipeline and the $550 million Tula-Villa de Reyes lines.

“This new project brings our footprint of existing assets and projects in development in Mexico to more than $5 billion,” TransCanada Chief Executive Russ Girling said in a statement.

TransCanada’s Keystone XL oil pipeline expansion was rejected by U.S. President Barack Obama late last year and the company is struggling with opposition to its Energy East project in Canada.

It is also slated to build numerous gas lines tied to proposed natural gas export terminals on Canada’s Pacific Coast, but final investment decisions on those liquefied natural gas projects have been delayed by environmental and market concerns.