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Sempra Energy/TransCanada JV Wins Pipeline Deal in Mexico
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Diversified energy company, Sempra Energy (SRE - Free Report) announced that Infraestructura Marina del Golfo ("IMG") has been awarded a transportation contract to build, own and operate a natural gas pipeline from South Texas to Tuxpan in Mexico. IMG is a joint venture between Sempra Energy’s Mexican unit, IEnova, and TransCanada Corporation (TRP - Free Report) . The contract was awarded by the Comision Federal de Electricidad ("CFE"), the state-owned power company in Mexico.
Details of the Project
The 497-mile South Texas-Tuxpan pipeline will have a capacity of 2.6 billion cubic feet per day and cost an estimated $2.1 billion, of which TransCanada will contribute nearly $1.3 billion. The project will be backed by the CFE’s 25-year natural gas transportation service contract and it is expected to come on-line in late 2018. TransCanada will develop, operate and own 60% of the project, with IEnova will have a 40% stake in it. The project will aid the transition of Mexico’s utility companies from oil to natural gas.
Going Forward
Sempra Energy has multiple development ventures underway, which are expected to boost its top and bottom line over the long haul. The company plans to spend $18.5 billion as capital expenditure between 2016 and 2020.
Moreover, the company believes that its three Liquified Natural Gas (“LNG”) export expansion projects have a competitive edge, which will drive long-term demand growth. The Cameron LNG liquefaction export facility is on track to complete all three trains in 2018. Starting 2019, it is expected to generate $300 million to $350 million in earnings annually.
Mexico is focused on meeting rising electricity demand across the country with clean energy. Natural gas pipeline contracts awarded by the CFE, the state-owned power company in the country, indicates a substantial increase in the use of natural gas for power generation.
On the same day, Spectra Energy Corp.’s (SE - Free Report) unit Valley Crossing Pipeline, LLC, was awarded a contract for the construction of a 168-mile intrastate natural gas pipeline project by the CFE for supplying natural gas transportation services to meet Mexico's growing electric generation needs. The project is expected to come on-line in early 2018 and has an estimated cost of $1.5 billion.
Zacks Rank & A Key Pick
Sempra Energy currently carries a Zacks Rank #4 (Sell). A better-ranked stock in the same space is Clean Energy Fuels Corp. (CLNE - Free Report) , sporting a Zacks Rank #1 (Strong Buy).
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Sempra Energy/TransCanada JV Wins Pipeline Deal in Mexico
Diversified energy company, Sempra Energy (SRE - Free Report) announced that Infraestructura Marina del Golfo ("IMG") has been awarded a transportation contract to build, own and operate a natural gas pipeline from South Texas to Tuxpan in Mexico. IMG is a joint venture between Sempra Energy’s Mexican unit, IEnova, and TransCanada Corporation (TRP - Free Report) . The contract was awarded by the Comision Federal de Electricidad ("CFE"), the state-owned power company in Mexico.
Details of the Project
The 497-mile South Texas-Tuxpan pipeline will have a capacity of 2.6 billion cubic feet per day and cost an estimated $2.1 billion, of which TransCanada will contribute nearly $1.3 billion. The project will be backed by the CFE’s 25-year natural gas transportation service contract and it is expected to come on-line in late 2018. TransCanada will develop, operate and own 60% of the project, with IEnova will have a 40% stake in it. The project will aid the transition of Mexico’s utility companies from oil to natural gas.
Going Forward
Sempra Energy has multiple development ventures underway, which are expected to boost its top and bottom line over the long haul. The company plans to spend $18.5 billion as capital expenditure between 2016 and 2020.
Moreover, the company believes that its three Liquified Natural Gas (“LNG”) export expansion projects have a competitive edge, which will drive long-term demand growth. The Cameron LNG liquefaction export facility is on track to complete all three trains in 2018. Starting 2019, it is expected to generate $300 million to $350 million in earnings annually.
SEMPRA ENERGY Price
SEMPRA ENERGY Price | SEMPRA ENERGY Quote
Other Contracts Awarded by the CFE
Mexico is focused on meeting rising electricity demand across the country with clean energy. Natural gas pipeline contracts awarded by the CFE, the state-owned power company in the country, indicates a substantial increase in the use of natural gas for power generation.
On the same day, Spectra Energy Corp.’s (SE - Free Report) unit Valley Crossing Pipeline, LLC, was awarded a contract for the construction of a 168-mile intrastate natural gas pipeline project by the CFE for supplying natural gas transportation services to meet Mexico's growing electric generation needs. The project is expected to come on-line in early 2018 and has an estimated cost of $1.5 billion.
Zacks Rank & A Key Pick
Sempra Energy currently carries a Zacks Rank #4 (Sell). A better-ranked stock in the same space is Clean Energy Fuels Corp. (CLNE - Free Report) , sporting a Zacks Rank #1 (Strong Buy).
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>