Mexico’s CFE announces $2.8 billion in private contracts after power reforms

• 9 years ago (2014-07-22)
• Junior Isles

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Mexico's national power company CFE has said that it plans to offer $2.8 billion in new natural gas and electricity infrastructure project contracts by the end of 2014.

CFE Chief Executive Enrique Ochoa revealed that, thanks to Mexico’s new power reforms, the contracts will be open to private firms in international public tenders and the projects will begin operation by 2017.

The five projects are all located near Mexico's northern US border and include two combined-cycle power plants (Norte III & Guaymas II), two natural gas pipelines (Encino-La Laguna & San Isidro-Samalayuca) as well as an electricity transmission project (Huasteca-Monterrey).

The projects are aimed at increasing natural gas imports from the US and lowering electricity rates via cheaper inputs and more modern power infrastructure.

IEnova, the Mexican unit of US energy firm Sempra Energy, South Korea's Kepco and France's GDF Suez are companies expected to bid for the contracts.

The 928 MW Norte III power plant will be located 30 km south of the border city of Ciudad Juarez will cost about $1 billion, while the 714 MW Guaymas II power plant will be located in northwestern Sonora State and will cost about $822 million. The results of both tenders are expected in December.

The 423 km Encino-La Laguna natural gas pipeline will cost around $650 million and transport gas from southern Texas to supply northern Chihuahua and Durango states, while the 23 km San Isidro-Samalayuca natural gas pipeline will cost about $50 million and transport gas from southern Texas directly to the new Norte III power plant in Chihuahua state.

Lastly, the Huasteca-Monterrey transmission line will cost about $257 million, including two substations, and cover 432 km across northern Tamaulipas and Nuevo Leon states.