Completing another major energy infrastructure deal in Latin America, Milbank, Tweed, Hadley & McCloy LLP has represented a group of financial institutions in providing financing for the $820 million build-out of a new natural gas pipeline in Mexico.
The La Laguna Pipeline project, stretching for 465 kilometers (289 miles) between El Encino in the state of Chihuahua and La Laguna in Durango, will connect a pair of power plants owned by Comisión Federal de Electricidad (CFE), Mexico’s state-owned electric company. The project is especially noteworthy because it will carry natural gas originating from Texas and supply power plants in northern Mexico with an alternative energy source to fuel oil.
Financing will go towards design, construction and operation of the La Laguna Pipeline, which is being developed by Fermaca Pipeline El Encino Holdings, a subsidiary of Mexico’s leading energy infrastructure company Fermaca Global LP. The pipeline, which will have a transportation capacity of 1,500 MMscfd, is expected to be operational in the first half of 2017.
The La Laguna Pipeline project is the latest major US-Mexico pipeline financing handled by Milbank. In recent years, the firm represented lenders in funding the construction 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 the Mexican state of Chihuahua.
The joint lead arrangers represented by Milbank consisted of Citigroup, ING, NordLB, Banco Santander, Sabadell and Goldman Sachs.
“We’re pleased to once again have worked with world-class financial institutions in bringing a large financing together to advance a major pipeline project in Mexico that originates with natural gas supplies in the US,” said Milbank partner Dan Bartfeld, who heads the firm’s Global Project Finance group.
“Mexico continues to make major strides in its energy infrastructure and the La Laguna Pipeline promises to help bring energy to the northern part of the country, and we are thrilled to again be part of a financing by Fermaca,” added Mr. Bartfeld, who had also led the team in the Agua Dulce financing, Chihuahua Pipeline financing and other ongoing pipeline projects in the US that will connect to the Mexican border.
In addition to Mr. Bartfeld, Milbank lawyers representing the lender group included senior associate Richard Hillman and associates Michael Evry and Matthew Bogdan in the Project Finance group, and partner Eric Moser and associate Brian Lee in the Alternative Investments group.
About Milbank
Milbank, Tweed, Hadley & McCloy is a leading international law firm that has been providing innovative legal solutions to clients throughout the world for nearly 150 years. Milbank is headquartered in New York and has offices in Beijing, Frankfurt, Hong Kong, London, Los Angeles, Munich, São Paulo, Seoul, Singapore, Tokyo and Washington, DC.
The firm’s lawyers provide a full range of legal services to the world’s leading commercial, financial and industrial enterprises, as well as to institutions, individuals and governments. Milbank’s lawyers meet the needs of its clients by offering a highly integrated and collaborative range of services across key practice groups throughout its global network. Milbank’s integrated practice is underpinned by its attorneys’ acknowledged technical excellence, sectorial experience and a strong tradition of innovation and client service.
