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TC Energy to build $5B gas pipeline in Mexico - Reuters

Jul. 01, 2022 6:25 PM ETTC Energy Corporation (TRP), TRP:CANFEBy: Carl Surran, SA News Editor22 Comments

Three Pipeline Reflecting Blue Sky

zorazhuang/iStock via Getty Images

TC Energy (NYSE:TRP) has reached an agreement with Mexico to build a $5B gas pipeline in Veracruz state on the Gulf of Mexico coast, a senior foreign ministry official said on Friday, according to Reuters.


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Comments (22)

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ephud profile picture
Ok, they're building a pipeline in Mexico, so who will supply the gas?
autofocus111 profile picture
@ephud As I understand it, the natgas will be supplied by USA via the Sur de Texas - Tuxpan pipeline. TRP also recently reached a MOU for another pipeline to Yucatan. Tuxpan looks like the landing point for the network buildout. TRP looks to be going big on Mexico. Some info on this at the links below.


>>>December 1, 2021 TC Energy Corp. sees “a wealth of untapped demand” for natural gas in Mexico to be unlocked over the next decade, said Stanley Chapman III, the firm’s president for U.S. and Mexico natural gas pipelines, on Wednesday...TC’s five fully-owned pipelines transport about 25% of the natural gas consumed in the country, and all are underpinned by take-or-pay firm transport agreements with CFE.


>>>November 29, 2021 Mexican state power utility Comisión Federal de Electricidad (CFE) said Thursday it is developing a $4.5 billion project with energy ministry Sener and Sistrangas pipeline grid operator Centro Nacional de Control del Gas Natural (Cenagas) to expand natural gas access on the Yucatán Peninsula. A CFE spokesperson told NGI’s Mexico GPI that the project in question is an expansion of the 2.6 Bcf/d Sur de Texas-Tuxpan offshore pipeline, which is jointly owned by TC Energy Corp. and Infraestructura Energética Nova, aka IEnova....CFE in August said it had signed a memorandum of understanding (MOU) with TC to develop the expansion project and to seek solutions to complete the stalled Tula-Villa de Reyes and Tuxpan-Tula pipelines.

ephud profile picture

Thanks very much for that info.
Long Time Running profile picture
Glad KXL was abandoned. It was only 8% complete and still faced legal challenges for eminent domain and environmental crossing of critical aquifers and rivers.

It would've taken years to complete and the overall costs were doubling every 5 years.

Much better to build natural gas trunk lines like TRP is doing, the payoffs much more immediate and predictable.
autofocus111 profile picture
TRP faced contract disputes with Mexican government over its last projects there, but did arrive to a settlement. Those learnings will presumably guide them in avoiding issues with new projects. The good news is they have opportunities to expand in the country. TRP is a natgas beast.

>>>Mexico Natural Gas Pipelines Tula and Villa de Reyes: In 2021, we advanced the resolution of disputed contract terms for the Tula and Villa de Reyes projects with the signing of an MOU on July 30, 2021 outlining main settlement principles. Villa de Reyes construction is ongoing but completion has been delayed due to COVID-19 contingency measures and challenges gaining access to land in certain local communities. Management is working closely with state and local governments to complete negotiations and achieve access to land so that construction can be completed. We expect to complete the construction of Villa de Reyes in phases during 2022.

polecat profile picture
How are they going to build the pipeline. I thought everyone in Mexico and parts south had moved to the US?
Fluidsdoc profile picture
Once again, America Last triumphs!
PalmDesertRat profile picture
Hope they get paid in advance. Mexico loves to stick it to gringos-just look at what they did to stz,eix et al. and that's only in the last year
Glad we own some of this company. Must be people who have brains work there.
aside from the fact this is not getting built in the US or Canada (hey Germany, how do you feel about the Energy East Pipeline now?) why is it 5B to run 583 kms from those two ports? seems high, no?
@Aggamemnon depends on the size of the pipeline and what it goes thru. A lot of the $ is used to purchase the land that the pipeline goes thru and maybe some rock blasting of the gradient
C185 profile picture
Mexico builds pipelines but the US Banana Republic under Biden doesn't.

Good thing nothing crosses the US border under Biden including carbon emissions.
Ol' Hickory profile picture
We’re now taking a backseat to Mexican know how.
Bob-in-DE profile picture
@Ol’ Hickory The know-how is Canadian and the economic benefits will go to Canada and Mexico. Thanks, Joe.
Can pay for it with damages from US government re: Keystone XL
bobcowman profile picture
Good luck. Law and courts of Mexico are of no account.
@bobcowman I prefer their chances there than in the USSA (Union of Socialist States of America). The Democrats are trying to destroy the oil and gas industry in the name of 'green transition' to folly. The Mexicans are not hypocrites. Mr Biden attacks American oil and gas companies while begging Saudi Arabia to produce more. Bottom line taxpayers continue to pay a heavy price. Bravo to Mexico.
@bobcowman TRP has had good success dealing with Mexico in the past. After all of the rhetoric coming from the president I am a little surprised these projects are going forward at this time. Nervous - yes. Scared - no.
@Vector1 bingo. at least with the Mexicans you got a chance. In the US they just cancel it when Presidents change for no good reason.
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