NEW YORK (Reuters) - Sempra Energy unit Sempra Mexico has been chosen to build a $1 billion natural gas pipeline that will connect the U.S. grid in Arizona with northwest Mexico, after a bidding process was completed, the company said on Monday.
The 500-mile line, which will be built in two sections, will supply some of the abundant reserves of U.S. natural gas to Mexican government-owned power plants that until now have run on fuel oil, Sempra said in a statement.
The first 310-mile (500-kilometer) section, which will run from Sasabe, south of Tucson, Arizona, to Guaymas, Mexico, will have a capacity of 770 million cubic feet of gas per day (mmcfd). That line is expected to begin operations late 2014.
The second segment, which will connect Guaymas with El Oro, will have the capacity to transport 510 mmcfd and is expected online in the third quarter of 2016.
Reporting By Edward McAllister; Editing by Bernard Orr