Pipeline plans: Bid awarded for Nueces-to-Brownsville project

BROWNSVILLE — Valley Crossing Pipeline LLC, a subsidiary of Houston-based Sempra Energy Corp., has been a awarded a contract by Mexican state-owned power company CFE to build and operate a 168-mile, 42-inch natural gas pipeline from Nueces County to Brownsville.

The $1.5 billion pipeline will connect the Agua Dulce gas hub near Corpus Christi with the Sur de Texas- Tuxpan pipeline in Mexico to deliver gas from the Eagle Ford Shale south of San Antonio.

At Brownsville the pipeline will enter the Gulf and connect with the Sur de Texas-Tuxpan pipeline several miles offshore on the U.S. side before coming onshore again 500 miles south of Brownsville at Tuxpan, Veracruz .

TransCanadaCorp, owner of Keystone Pipeline XL, which is being contested in federal court, won the $2.1 billion bid to build the Sur de Texas- Tuxpan pipeline, which is expected to be in operation in late 2018.

The pipelines are part of roughly $10 billion in natural gas transport and power plant projects in the wake of broad energy reforms in Mexico that have opened up the country’s oil and gas and utility sectors to foreign investors for the first time in many decades.

The pipelines will have the capacity to supply 2.6 billion cubic feet of natural gas each day to CFE power plants in the eastern, central and western regions of Mexico, including Tamaulipas and Veracruz states.

The projects are backed by a 25-year contract with CFE, which plans to build new gas-fired power plants as well as convert existing fuel-oil-fired plants to gas. The gas transportation and power plant projects, two dozen in all, will add 1,442 megawatts to Mexico’s generating capacity.