TransCanada teaming up with Sierra Oil & Gas, Grupo TMM SAB
Aug 2 (Reuters) – TransCanada Corp said on Tuesday it plans to build an $800 million marine terminal and oil pipeline project for refined products like gasoline and jet fuel, as the Canadian pipeline operator continues to expand its footprint in Mexico.
The project, a joint venture with Sierra Oil & Gas and Grupo TMM, comes at a time when TransCanada’s key projects closer to home are facing delays.
The proposed development includes a marine terminal, a 265-km (165-mile) refined products pipeline and an inland storage and distribution hub in central Mexico.
The 100,000 barrels per day pipeline will run parallel to TransCanada’s $500 million Tuxpan-Tula natural gas pipeline, now under construction.
TransCanada, which has been ramping up its spending in Mexico, said it will hold a 50 percent interest in the project, with Sierra Oil & Gas holding 40 percent and Grupo TMM 10 percent.
The Calgary-based company said in June it would build and operate a $2.1 billion natural gas pipeline in Mexico through a joint venture with a unit of Sempra Energy.
The newest project will add to the company’s roughly $5 billion footprint in Mexico. TransCanada is marketing a minority stake in six of its Mexico pipelines to help pay for its recent takeover of Columbia Pipeline Group.
The company did not give a timeline for the project, which would tap into growing demand in Mexico for gasoline, diesel and jet fuel.
While business is ramping up in Mexico, the company has struggled with crude oil projects closer to home. Its Keystone XL pipeline expansion was rejected by U.S. President Barack Obama late last year and its Energy East project in Canada faces strong opposition from environmental and aboriginal activists.
TransCanada’s shares were up 0.33 percent at C$60.74 on Tuesday in Toronto.
(Reporting by Julie Gordon in Vancouver and Arathy S Nair in Bengaluru; Editing by Shounak Dasgupta and James Dalgleish)