TC Energy Hires Contractor to Lay 715-km Stretch of $4.5 Billion Offshore Gas Pipeline

By Mary Holcomb, Digital Editor

(P&GJ) — TC Energy has hired Swiss-based contractor Allseas to install the 715-km (444-mile) offshore segment of the Southeast Gateway Pipeline in the Gulf of Mexico.

The $4.5 billion Southeast Gateway Pipeline, which received approval in August, is the first significant gas infrastructure project to result from a strategic partnership between TC Energy and Mexico's state-owned utility Comisión Federal de Electricidad (CFE), Upstream Online reported.

“Together, TC Energy and the CFE will develop critical energy infrastructure to serve the growing central and southeast regions of Mexico,” François Poirier, president and CEO of TC Energy, said. “The Southeast Gateway Pipeline will be TC Energy’s second marine natural gas pipeline in Mexico, connecting to the coastal regions of Veracruz and Tabasco, and is another prime example of our ability to originate world-class projects that offer incremental growth to our long-term outlook.”

The 36-inch diameter natural gas pipeline will follow the coast southward, running from Tuxpan through the Gulf of Mexico, essentially connecting the ports of Coatzacoalcos and Dos Bocas. An estimated 37 million cubic meters of natural gas per day will be transported by the pipeline.

TC Energy said sanctioning of the pipeline would expand its secured capital program to $33 billion and could add to its 2021-2026 adjusted EBITDA growth outlook.

“We will always utilize the most optimal funding tools to maintain our financial strength and flexibility while delivering per share value,” Poirier said. “Accordingly, the incremental growth from the Southeast Gateway Pipeline project will be prudently funded through a combination of common equity, hybrid securities, long-term debt, commercial paper as well as potential non-core asset sales and strategic partnership opportunities in Mexico. The alliance with the CFE and sanctioning of the Southeast Gateway Pipeline project provides further visibility to earnings and cash flow growth while supporting progress towards our overall leverage target.”

The pipe for the project will be supplied by Germany-based EUROPIPE, which received the order from TC Energy back in August, Offshore Energy reported. The scope of work includes providing 365 kilometers (265,000 tons) of pipe with an anti-corrosion coating.

The shareholders of the business supply the raw materials to produce the pipes, and the EUROPIPE subsidiary MÜLHEIM Pipecoatings is in charge of external coating and internal lining. EUROPIPE Mülheim will provide about half of the 36-inch thick-wall pipeline pipes.

In addition to the installation of the 685-kilometer-long Sur de Texas-Tuxpan pipeline in 2017, which Allseas also installed to enable the delivery of gas produced in Texas to Mexico, the company stated that the Southeast Gateway Pipeline is its second pipeline in Mexico.

The Southeast Gateway Pipeline is anticipated to start being laid at the end of 2023 and is expected to be operational by the middle of 2025.

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