First Reserve and PEMEX agree to co-invest $1 billion in Mexican energy projects

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First Reserve and PEMEX agree to co-invest $1 billion in Mexican energy projects

Petroleos Mexicanos (Pemex) and First Reserve have announced a US$1 billion agreement to mutually invest in energy infrastructure for Mexico.

The joint venture represents a significant milestone for both parties towards continuing to invest in energy infrastructure projects in Mexico and a statement of foreign confidence in the Mexican energy industry.

With this landmark partnership established, Pemex and First Reserve plan to invest capital in energy infrastructure projects throughout Mexico, combining the financing, structuring and industrial and operational experience needed to bring these critical projects to fruition.

These investments are expected to enhance the country’s energy profile, lowering electricity prices and supporting Mexican industry.

William Macaulay, Chairman and Co-CEO of First Reserve, commented,

“As global investors, First Reserve is excited to be expanding our existing portfolio in Mexico, where we have believed there to be attractive investment opportunities for some time. Through formal collaboration with Pemex, we feel we have gained substantial access to a region with strong supportive macro dynamics alongside a motivated and accomplished partner. First Reserve looks forward to mutually exploring multiple investment opportunities throughout the country’s vast energy value chain on behalf of our investors and the country of Mexico.”

The two organizations recently announced the first of such investments – Los Ramones Phase II North and Los Ramones Phase II South. – which are expected to consist of 744 kilometers of natural gas pipelines, creating an essential energy connection for Mexico. Both Projects will benefit from a 25 year take-or-pay Transport Services Agreement (TSA) with Pemex Gas y Petroquímica Básica (PGPB).

Construction of the projects has already begun, with full commercial operations expected in mid-2016. Additional projects the two companies are pursuing include other large-scale essential infrastructure opportunities across the energy value chain.

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