The Mexican subsidiary -- Transportadora de Gas Natural del Noroeste -- was awarded the contract by Mexican state power company Comision Federal de Electricidad.
Russ Girling, president and chief executive officer of parent company TransCanada, based in Calgary, said the contract to build, own and operate the pipeline was part of the Mexican government's efforts to expand an electrical grid powered by natural gas.
"This award is another example of TransCanada's commitment to help develop Mexico's energy infrastructure in a sustainable and cost-efficient manner," he said in a statement.
The 329-mile pipeline will stretch between the Mexican states of Chihuahua and Sinaloa. The pipeline has a contracted service volume of 670 million cubic feet of natural gas per day and should go into service by late 2016.
The $1 billion project is supported by a 25-year service contract with CFE.
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