TC Energy and CFE: Southeast Gateway pipeline to operate in 2025

The Southeast Gateway pipeline will begin service in mid-2025, said TC Energy, its developer, together with Mexico‘s state-owned electricity utility, Comisión Federal de Electricidad (CFE).

To size up the project: the 1.3 Bcf/d, 715 km (444 miles) offshore natural gas pipeline will serve the southeast region of Mexico, with an estimated project cost of US$4.5 billion.

Subject to regulatory approvals from Mexico’s Federal Economic Competition Commission (Cofece) and Energy Regulatory Commission (CRE), the strategic alliance between the two companies offers CFE the possibility of an equity stake in Transportadora de Gas Natural de la Huasteca (TGNH), a subsidiary of TC Energy.

This participation is conditioned to CFE providing capital, acquiring land and supporting the obtaining of permits for TGNH’s projects.

When the Southeast Gateway pipeline enters service, CFE’s equity interest in TGNH will be 15%, and will increase to approximately 35% when the contract expires in 2055.

TC Energy forecasts that regulatory approvals related to CFE’s equity interest in TGNH will take up to 24 months.

In general, the TGNH System is located in central Mexico and is comprised of the existing Tamazunchale pipeline and the Tula, Villa de Reyes and Southeast Gateway pipelines, with sections in service or currently under construction.

This system supplies or will supply several power plants and industrial facilities in Veracruz, Tabasco, San Luis Potosí, Querétaro and Hidalgo.

The system also has interconnections with upstream pipelines that supply from the Agua Dulce and Waha centers in Texas.

Southeast Gateway pipeline

In 2023, TC Energy will continue to focus on the execution of its current capital program, which includes advancing the construction of its Southeast Gateway pipeline in Mexico, new investments in the NGTL system, mechanical completion of the Coastal GasLink pipeline, as well as the completion and commencement of new pipeline projects in the United States.

Recently, White & Case advised TC Energy in connection with a $2.3 billion senior term loan and revolving loan financing of its Mexican subsidiary, TC Energia Mexicana.

There were 15 lenders involved in the deal. The loan proceeds were used to refinance existing intercompany debt, which will facilitate the development and construction of the Puerta del Sureste Pipeline.

TC Energy Corporation is a leading North American energy company that develops and operates energy infrastructure in Canada, the United States and Mexico.


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