TransCanada Corp. will build, own and operate the Tula-Villa de Reyes Pipeline in Mexico, the company said April 11.

Construction of the pipeline is supported by a 25-year natural gas transportation service contract for 886 million cubic feet a day with the Comisión Federal de Electricidad, Mexico's state-owned power company.

TransCanada will invest about US$550 million in the 36-inch diameter, 420-kilometer (261-mile) pipeline, whose in-service date is expected to be in early 2018.

The pipeline will begin in Tula in the state of Hidalgo, and terminate in Villa de Reyes in the state of San Luis Potosí, transporting natural gas to power generation facilities in Mexico’s central region. The project will interconnect with TransCanada's Tamazunchale and Tuxpan-Tula pipelines and other transporters’ pipelines.

The Tula-Villa de Reyes Pipeline is the most recent addition to TransCanada's expanding portfolio in Mexico. TransCanada was awarded the Tuxpan-Tula Pipeline in November. By 2018, TransCanada will operate six major natural gas pipeline systems in Mexico representing an overall investment of about US$3.6 billion.

TransCanada Corp. is based in Calgary, Alberta.