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Bloomberg
Eagle Ford shale producers are getting a new outlet to ship their abundant natural gas to Mexico as the southern neighbor seeks supplies to increase power generation.
A unit of Spectra Energy Corp. and a joint venture between Sempra Energy’s Ienova and TransCanada Corp. won contracts to link the Agua Dulce Hub on the Texas Gulf Coast to a major port in Mexico.
The Comision Federal de Electricidad, Mexico’s state-run utility, awarded Spectra’s Valley Crossing Pipeline LLC a $1.5 billion contract to develop a 168-mile pipeline connecting Agua Dulce, near Corpus Christi, to Brownsville on the border. The TransCanada-Ienova venture will build a $2.16 billion, 800-kilometer underwater line to ship the gas from Brownsville to the Tuxpan port, a Mexican shipping hub for tankers supplying petroleum products to state-run PetroleosMexicanos.
The contract mitigates investor concern about Ienova’s ability to continue winning projects in Mexico and gives more credibility to previously announced growth plans.