A joint venture between Sempra Energy’s Ienova unit and TransCanada Corp. won a $2.16 billion bid to develop an underwater pipeline from Texas to Mexico.
The venture was the sole bidder qualified to participate in the auction, the result of which was announced in Mexico City on Monday by Comision Federal de Electricidad, Latin America’s largest utility company.
Infraestructura Energetica Nova SAB, as Sempra’s unit is formally called, rose as much as 0.8 percent before paring gains.
The result is positive as it eliminates any investor concerns that Ienova might not land an important project this year, according to Marissa Garza, an analyst at Banorte-Ixe, in a research note.
The 800-kilometer (497-mile) pipeline will run from the U.S.-Mexico border to the Tuxpan port, a shipping hub for tankers supplying petroleum products to state-run Petroleos Mexicanos, or Pemex. The line will transport natural gas to power plants in northern and central Mexico and is forecast to be completed in 28 months. Last year, TransCanada won a bid for a gas pipeline connecting Tula, where Pemex’s second-largest refinery is located, to Tuxpan.