Mexico’s demand for more electricity is creating a golden opportunity for Eagle Ford producers.
TransCanada and Spectra Energy are among producers who will receive $3.6 billion in contracts from Mexico’s state-owned Federal Electricity Commission to build 665 miles of pipelines to carry natural gas.
In 2014, Mexico passed historic energy reforms to boost the lagging production brought on by decades of inefficiency and diminished supply. This move set the stage for greater collaboration between businesses that operate in the Eagle Ford Shale and Mexico.
TransCanada was the first private company to construct and operate natural gas pipelines in Mexico and become a key player since the Mexican government made the expansion of the national gas pipeline a priority. In this latest deal, TransCanada will construct and operate a $2.1 billion natural gas pipeline in Mexico, which will ship natural gas from both U.S. shale plays and offshore sources.
By 2018, TransCanada will be operating seven major natural gas pipeline systems in Mexico representing approximately a US$5 billion investment. In addition to supplying natural gas to some areas of the country where it has never before been available, these projects contribute to strengthening local economies and provide significant employment opportunities, particularly during construction.
Spectra Energy was awarded a $1.5 billion contract to build a pipeline from Nueces County, Texas, to the Mexican border at Brownsville. The Texas portion of the pipeline is planned to be completed in 2018 and will transport up to 2.6 billion cubic feet of natural gas a day.