TransCanada’s Tamazunchale Pipeline Extension Now Operational
TransCanada Corporation (TSX:TRP) (NYSE:TRP) (TransCanada) announced that it has placed into service the Tamazunchale Pipeline Extension, the most recent natural gas infrastructure project to be completed by TransCanada in Mexico.
“The completion of the Tamazunchale Pipeline Extension marks another milestone in our decade-long commitment to building new energy infrastructure in Mexico,” said Russ Girling, TransCanada’s president and chief executive officer. “The successful completion of the extension will bring additional supplies of clean burning natural gas to power electric generation facilities in central Mexico.”
The new US$600 million pipeline is an extension of the existing Tamazunchale Pipeline that links an LNG terminal and natural gas supplies from the east coast of Mexico and U.S. to key power facilities in Tamazunchale. The extension begins at the end point of the existing Tamazunchale Pipeline in the state of San Luis Potosi and extends through the states of Hidalgo and Queretaro, where it connects with Mexico’s National Pipeline System and serves a combined-cycle power generating facility near El Sauz, Queretaro.
TransCanada has a 25-year natural gas transportation service contract with the Comisión Federal de Electricidad (CFE), Mexico’s state-owned power company. The pipeline extension is approximately 230 kilometers (144 miles) long and has a contracted capacity of 630 million cubic feet a day. The pipeline used a combination of 30- and 36-inch-diameter pipe.
More than 2,000 residents in Mexico were employed during construction of the Tamazunchale Pipeline Extension. Local and international contractors were key to successfully building the pipeline through some of Mexico’s most mountainous terrain. Crews used innovative engineering and leading-edge construction techniques that included boring through a mountain with a 672-meter micro tunnel and a cable crane system to install the pipeline on a steep mountainous slope.
Along with the Tamazunchale Pipeline, TransCanada also owns and operates the Guadalajara Pipeline that connects natural gas supplies from the Manzanillo LNG terminal to power facilities in Manzanillo and other markets in Guadalajara and central Mexico.
TransCanada is currently constructing the Topolobampo Pipeline, a US$1 billion pipeline project that will bring natural gas from in El Encino, Chihuahua, to Topolobampo, Sinaloa. The pipeline will interconnect with the Mazatlan Pipeline, a US$400 million pipeline currently under construction, which begins at El Oro and ends in Mazatlan, also in Sinaloa. Each pipeline is supported by a 25-year natural gas transportation service contract with the CFE. By 2016, TransCanada will have invested more than US$2.6 billion in Mexico.
“Mexico’s new energy reform laws are expected to provide companies like TransCanada with additional opportunities to invest in natural gas infrastructure projects that will allow Mexico to meet growing demand,” Girling added. “TransCanada looks forward to continuing to increase its investment in Mexico as the country expands its energy infrastructure.”