TransCanada has won a contract to build, own and operate a US$500 million natural gas pipeline for Mexico's state-owned power company. The Tuxpan-Tula pipeline will help meet Mexico's increasing demand for natural gas as the country shifts to the cleaner-burning fuel.

The company says the pipeline should be completed by 4Q17 and it has a 25 year contract with the Comision Federal de Electricidad to operate the line.

The 250 km, 36 in. pipeline will run from the state of Veracruz to natural gas power plants in central and western Mexico, supplying up to 886 million ft3/d of gas.

TransCanada already owns and operates the Tamazunchale and Guadalajara pipeline systems in Mexico and is working to complete the Topolobampo and Mazatlan pipelines.

"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 Chief Executive Officer.

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 as well as 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.

Source: -