TransCanada said Friday that it will build, own and operate the Tamazunchale Pipeline Extension in Mexico.
Construction of the pipeline is supported by the award of a 25-year natural gas transportation service contract by the Comision Federal de Electricidad (CFE), Mexico's state-owned power company.
TransCanada expects to invest approximately $500 million in the pipeline and anticipates an in-service date in the first quarter of 2014.
The project will be 235 kilometers (146 miles) long and have contracted capacity of 630 million cubic feet a day (MMCf/d).
The pipeline will use a combination of 30- and 36-inch-diameter pipe and have 37 megawatts of installed compression, company officials said.
The pipeline will originate at the terminus of TransCanada's existing Tamazunchale Pipeline in the state of San Luis Potosi and extend through the states of Hidalgo and Queretaro, where it will connect with Mexico's National Pipeline System and serve a CFE combined-cycle power generating facility near El Sauz, Queretaro.
"The Tamazunchale Pipeline Extension demonstrates our continued commitment to developing Mexico's energy infrastructure to meet growing requirements for increased natural gas supply," said Russ Girling, TransCanada's CEO.
"The pipeline represents one of the many low-risk energy infrastructure opportunities within our existing business lines that are continuously being developed by our company to help deliver long-term shareholder value, Girling added.
The Mexican government recently announced a number of current and expected natural gas infrastructure projects for the country.
This infrastructure allows Mexico to meet growing demand and supports greenhouse gas reduction initiatives, allowing access to natural gas as a replacement fuel for heavy oil.
TransCanada noted that it will also pursue future development opportunities in Mexico.