TC Energy and Mexico's state-owned power utility CFE have agreed to lay the $4.5 billion Southeast Gateway Pipeline, a 715-kilometer offshore natural gas pipeline serving the southeastern region of Mexico.

The two companies have reached a final investment decision to continue construction of the pipeline project, which will have a capacity of 1.3 billion cubic feet per day. The Southeast Gateway Pipeline Project is part of a broader partnership announced by TC Energy and CFE with the goal of developing world-class energy infrastructure in Mexico. The Southeast Gateway Pipeline will start onshore at Tuxpan, Veracruz, and extend offshore before landing at Coatzacoalcos, Veracruz, and Dos Bocas, Tabasco.

Francois Poirier, President and CEO of TC Energy, said: “The Southeast Gateway pipeline will be TC Energy’s second offshore natural gas pipeline in Mexico, connecting Veracruz and the coast of Tabasco, and is another addition to our ability to initiate world-class projects. A typical example. This provides incremental growth to our long-term outlook.

As part of the alliance, TC Energy and CFE will combine a previously signed transportation services agreement for the former's natural gas pipeline assets in central Mexico. TSA will now be bundled under a dollar-denominated take-or-pay contract that will extend through 2055. The new TSA will also manage related new infrastructure projects developed in partnership with Elmex. Keywords: engineering news, overseas news

The parties also agreed to jointly end the currently suspended international arbitration related to the TVDR and TXTL pipelines. As a result, TC Energy will receive a return on all capital it has invested in the asset in the past. In addition, both parties have committed to jointly build and complete the TXTL pipeline through the construction of its central section, subject to reaching FID in the fourth quarter of 2022.Editor/XingWentao