WHAT YOU NEED TO KNOW

  • ESENTIA agreed to acquire 100% of EOM from TC Energy for a gross purchase price of $400 million.
  • EOM operates the 313 km Guadalajara-Manzanillo pipeline, which transports up to 500 MMcfd of natural gas.
  • The acquisition would extend ESENTIA’s network to the Port of Manzanillo and connect with its existing VAG pipeline system.
  • The transaction is expected to close in the first half of 2027, subject to closing conditions, regulatory approvals and consents.

ESENTIA Energy Development SAB de CV has agreed to acquire 100% of the equity interests in Energía Occidente de México S de RL de CV from TC Energy Corp. for a gross purchase price of $400 million. The agreement centers on a major natural gas transportation asset in western Mexico.

Mexico City based ESENTIA would gain ownership of the company known as EOM, which owns and operates the 313 km Guadalajara-Manzanillo natural gas pipeline system. The line extends from the Guadalajara area in Jalisco to Manzanillo, Colima.

The EOM pipeline is directly interconnected with ESENTIA's Villa de Reyes-Aguascalientes-Guadalajara pipeline system, known as VAG. Esentia Pipeline de Occidente S de RL de CV, an indirect subsidiary of ESENTIA, operates the VAG system.

The Guadalajara-Manzanillo system transports up to 500 MMcfd of natural gas. It connects imported LNG supply near Manzanillo and continental gas supply near Guadalajara with power plants and industrial customers in Colima and Jalisco.

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Upon closing, the acquisition will extend ESENTIA's pipeline network to the Port of Manzanillo on Mexico's Pacific coast. ESENTIA said in a Sept. 21 release that it would become the only private operator with an integrated natural gas pipeline system connecting the Permian basin in Texas with Mexico's Pacific coast.

The transaction forms part of ESENTIA's strategy to develop a transportation system spanning the border. It would combine the Guadalajara-Manzanillo asset with infrastructure already operated through the company's indirect subsidiary.

The deal would “expand ESENTIA's ability to serve existing and prospective customers within the combined system's area of influence, including demand from power generation, industrial customers and potential LNG-related projects,” said Daniel Bustos, chief executive officer.

The pipeline's position between Manzanillo and Guadalajara gives the combined system connections to two sources of supply identified by ESENTIA. Those sources comprise imported LNG near Manzanillo and continental natural gas near Guadalajara.

ESENTIA also highlighted the construction of its Aguascalientes Compression Station. The project is expected to increase capacity on the VAG pipeline system beginning in early 2027.

The compression station is part of the company's three phase expansion plan. ESENTIA estimates the plan will require a total investment of $680 million and deliver an additional 660 MMcfd of natural gas transportation capacity.

The planned acquisition and compression project address separate parts of ESENTIA's pipeline development program. The EOM transaction would extend the company's physical network to Manzanillo, while the Aguascalientes work is expected to increase capacity on VAG.

TC Energy described the proposed sale in terms of capital deployment across its wider operations. The transaction creates “optionality to redeploy proceeds from a mature asset towards high-value growth opportunities across our North American footprint,” said François Poirier, president and chief executive officer, in a Sept. 21 release.

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The transaction is expected to close during the first half of 2027. Completion remains subject to customary closing conditions, regulatory approvals and consents.

Following the closing, TC Energy will continue to own and operate its broader natural gas pipeline network in Mexico. That network includes about 3,300 km of pipeline and 8.7 bcfd of installed natural gas transportation capacity.

The proposed ownership change is therefore limited to EOM and its Guadalajara-Manzanillo system. TC Energy's remaining Mexico network will stay under its ownership and operation after the transaction closes.

For ESENTIA, the purchase would place the 313 km pipeline alongside the interconnected VAG system within its network. The combined infrastructure would serve existing and prospective customers linked to power generation, industrial demand and potential projects related to LNG.

The acquisition remains a pending transaction until the required conditions, approvals and consents are secured. If completed on the expected schedule, ESENTIA would take ownership in the first half of 2027 while advancing the Aguascalientes Compression Station toward its expected early 2027 capacity increase.