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UPDATE 2-TransCanada to build $2.1 bln gas pipeline in Mexico

Published 2016-06-13, 05:30 p/m
© Reuters.  UPDATE 2-TransCanada to build $2.1 bln gas pipeline in Mexico

* TransCanada to own 60 pct stake in project
* Sempra Energy (NYSE:SRE) unit to own remaining stake
* TransCanada to invest $1.3 bln in pipeline

(Adds details on natural gas pipeline in Texas)
By Julie Gordon
June 13 (Reuters) - TransCanada Corp TRP.TO 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 said on Monday the Sur de Texas-Tuxpan pipeline
project would be built through a joint venture with a unit of
Sempra Energy SRE.N and be backed by a 25-year transportation
service contract with Mexico's state-owned power company.
TransCanada, which will own a 60 percent stake in the 800
kilometer (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 Corp (NYSE:SE) SE.N 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 LLC, 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.

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