TransCanada pipeline in Mexico seen displacing fuel oil with U.S. gas

  • TransCanada (NYSE:TRP) says its 670M cf/day Topolobampo Pipeline has started commercial service, part of an effort to move more U.S. natural gas to northwest Mexico to serve power generation demand.
  • TRP expects the $1.2B, 348-mile pipeline project, which provides the upstream interconnection with the company's Mazatlan Pipeline, to reduce fuel oil consumption in the power markets in Mexico's Sinaloa and Sonora states.
  • While near-term utilizations are expected to come in well below capacity, Platt's says Topolobampo will provide a much needed outlet for Permian Basin associated gas production, which is itself nearing takeaway capacity constraints.

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