450 KM pipeline being built by Fermaca will extend between Durango and Aguascalientes
Completing another major energy infrastructure deal in Mexico, Milbank, Tweed, Hadley & McCloy LLP advised a group of major international lenders providing financing for the construction of a natural gas pipeline between the states of Durango and Aguascalientes.
The pipeline, which is being developed by Mexico’s leading energy infrastructure company Fermaca, will run north-south approximately 450 kilometers (280 miles) from the La Laguna hub in Durango to a pair of power stations in Aguascalientes owned by Comisión Federal de Electricidad (CFE), Mexico’s state-owned electric company, and also connect to a pipeline extending from the state of Jalisco through Aguascalientes to the state of San Luis Potosí.
The project continues the 465-kilometer pipeline project from the northern state of Chihuahua to Durango for which Milbank advised on $820 million in financing in 2015. The conduit carries natural gas originating in Texas to northern Mexico power plants, providing an alternative to fuel oil.
The Milbank team advised the joint lead arrangers including ING, Nord/LB, Banco Santander, Banco Sabadell, Mizuho Bank, Natixis, Banca Intesa, KfW, and BNP Paribas with a team led by Global Project, Energy and Infrastructure Finance practice leader Daniel Bartfeld and associates Michael Evry and Caylee Hong.
Mr. Bartfeld, who has spearheaded Milbank’s role in previous and ongoing financings related to pipelines between the US and Mexico, said: “We’re pleased to once again work with world-class financial institutions on a financing by Fermaca to bolster Mexico’s energy infrastructure and provide a market for U.S. natural gas supplies.”
The first two legs of the La Laguna Pipeline project are only the latest major US-Mexico pipeline financing handled by Milbank. In recent years, the firm had lead roles in the financing of the 120-mile Agua Dulce natural gas pipeline from Texas to Mexico, and also a 237-mile natural gas transmission pipeline with an interconnection point at the US/Mexico border in Chihuahua. Milbank is currently working on several other pipelines to/within Mexico that will achieve financial closing shortly.
