Complex onshore-offshore transaction for Nueva Era pipeline is the first pipeline with sections on both sides of the border
Milbank, Tweed, Hadley & McCloy LLP has advised a group of international financial institutions acting as arrangers and lenders for $353.3 million in financing for a natural gas pipeline project connecting sites in southern Texas and Monterrey, Mexico.
The Nueva Era Pipeline will run approximately 200 miles from a hub in Webb County, which borders the Rio Grande River, into the northern Mexican state of Nuevo León, whose largest city is Monterrey. The complex cross-border nature of the project involves both US and Mexican collateral security packages and regulatory regimes.
Comision Federal de Electricidad (CFE), Mexico’s state-owned electric utility is the anchor shipper on the line, which will also offer natural gas transportation services to private shippers on an open access basis. Nueva Era is one of the first CFE pipelines to include portions in both Mexico and the US.
Milbank advised Mitsubishi UFJ Financial Group and Santander Bank as lead arrangers, and lenders Sumitomo Mitsui Banking Corp., Caixa, and Société Générale S.A. with a team led by Daniel Michalchuk and Dan Bartfeld, both partners in Milbank’s Global Project, Energy and Infrastructure Finance Group, with associates Caylee Hong, Michael Evry and Timothy Fitzpatrick.
Mr. Michalchuk, partner in Milbank’s Global Project, Energy and Infrastructure Finance Group, said: “The Nueva Era project is the latest pipeline transaction the firm has handled that successfully joins American natural gas supplies with the energy needs of northern Mexico, at a substantially lower cost than with traditional energy sources. These projects are a win-win benefitting American energy producers as well as Mexican customers.”
In the past several years Milbank has advised on billions of dollars of pipeline projects on the US-Mexico border, including four in the last 18 months.
