CFE, TC Energy Celebrate Historic Alliance

CFE and Canadian company TC Energy celebrated a strategic alliance that will enable the development of a new offshore pipeline worth US$4.5 billion aiming to transport natural gas to Mexico’s southeastern states. CFE Director General Manuel Bartlett stressed that this alliance is a historic milestone for the public-private sector.

On Aug. 30, 2022, executives of CFE, CFEnergía and the Canadian company TC Energy celebrated the consolidation of a newly-announced strategic alliance at Mexico City’s Museum of Anthropology. CFE Director Manuel Bartlett expressed his gratitude to President López Obrador for his support in the development of pipeline infrastructure, which in his opinion will provide stability and growth to the Southeast, reducing the regional disparity between the North and South of the country.

Meanwhile, François Poirier, President and CEO, TC Energy stated this alliance's focus was to provide solutions and sustainable energy infrastructure that will benefit Mexico for many years to come. “I would like to acknowledge and thank President López Obrador for generating the strong impulse that led us to achieve this alliance. The president’s endorsement of our partnership and the Southeast Gateway project is critical in order to move toward what we all have envisioned: the energy supply that Mexico needs for a brighter future that benefits Mexicans across the country," he said.

The Southeast Gateway entails the construction of a natural gas pipeline that will transport natural gas from Tuxpan to Coatzacoalcos, both in Veracruz, ending its journey in Paraiso, Tabasco. The multibillion-dollar project is projected to have a length of 715km and a capacity of 1.3Bcf/d. It is expected to be online by 2025.

Furthermore, the alliance between CFE and TC Energy will consolidate the pipeline contracts of TC Energy subsidiary Transportadora de Gas Natural de la Huasteca (TGNH) via a single service contract that extends until 2055. The companies will furthermore move toward concluding the construction of the Tuxpan-Tula pipeline through an alternative route, after an Indigenous community objected to the direction of the original plan.

In addition, Miguel Santiago Reyes, Director, CFEnergía, said that the alliance will reduce pollution in the Yucatan peninsula and the center of the country, as well as consolidate the gas transportation systems under a single and leveled fee. This will enable budgetary certainty and ensure low electricity tariffs for off-takers.

With the Southeast Gateway pipeline, TC Energy consolidates its position as the main Canadian investor in Mexico and will place Canada as the second source of FDI in the country, above Spain.