Mexico Advances LNG Project, Awards Pipeline to TransCanada

TransCanada Corporation announced it was the successful bidder on a contract to build, own and operate a US$320 million pipeline in Mexico. The project is supported by a 25-year contract for its entire capacity with Comision Federal de Electricidad (CFE), Mexico's state-owned electric company.

The proposed Guadalajara Pipeline will follow a 310-kilometer (193-mile) route from a liquefied natural gas terminal under construction near Manzanillo on Mexico's Pacific Coast to Guadalajara, the second largest city in Mexico. The 30-inch-diameter pipeline will be capable of transporting 500 million cubic feet a day (MMcf/d) of natural gas. The majority of the capital expenditures are expected to be made in 2010 with a targeted in-service date of March, 2011.

"The Guadalajara Pipeline project builds on TransCanada's excellent working relationship with CFE," said Hal Kvisle, TransCanada president and chief executive officer. "With Mexico's growing reliance on natural gas and TransCanada's proven success in building, owning and operating Mexican pipelines, the Guadalajara Pipeline offers an excellent opportunity for TransCanada to expand its footprint in Mexico."

TransCanada owns and operates the 130-kilometer (81-mile) Tamazunchale Pipeline in central Mexico. In the 1990s, TransCanada built the 700-kilometer (435-mile) Mayakan Pipeline and the 214-kilometer (133-mile) El Bajio pipelines. Those pipelines, later sold, were the first non-PEMEX pipelines in Mexico. PEMEX is Mexico's state-owned petroleum company.

The Guadalajara Pipeline would serve power generation load in Manzanillo and Guadalajara as well as connecting to an existing PEMEX natural gas line near Guadalajara. The source of natural gas will be a liquefied natural gas terminal near Manzanillo, primarily supplied by Peruvian LNG.