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Bank of China finances Southeast Gateway Pipeline via $1.8 billion syndicated loan
| Funder | Bank of China (BOC) |
|---|---|
| Recipient Organization | TC Energía Mexicana S. de R.L. de C.V. |
| Country | Mexico |
| Start Date | Jan 17, 2023 |
| End Date | Mar 09, 2029 |
| Duration | 2,243 days |
| Number of Grantees | 1 |
| Roles | Recipient |
| Data Source | AidData Chinese Aid |
| Grant ID | 108841 |
Grant Description
Bank of China contribution to USD 1.8 billion syndicated loan for Southeast Gateway Pipeline in Mexico in 2023 On January 17, 2023, TC Energía Mexicana S. de R.L. de C.V. — a special purpose vehicle and wholly-owned subsidiary of TC Energy Corporation — signed a $500 million senior unsecured revolving credit facility agreement (with a 5-year maturity) and a $1.8 billion senior unsecured term loan agreement (with a 5-year maturity) with a bank syndicate for the 2928 km Transportadora de Gas Natural de la Huasteca (TGNH) Southeast Gateway Pipeline Refinancing Project.
Both loans carried floating (variable) interest rates.
Participants in the syndicate included Scotiabank, BBVA México, BMO Capital Markets, Mizuho Bank, Banco Inbursa (Institución de Banca Múltiple), Banco Nacional de México (Member of Grupo Financiero Banamex), Bank of America, Bank of China, HSBC Bank, ATB Financial, Canadian Imperial Bank of Commerce, Royal Bank of Canada, and Deutsche Bank AG.
Bank of China reportedly contributed $36.3 million to the $500 million senior unsecured revolving credit facility and $130.7 million to the $1.8 billion term loan.
The senior unsecured revolving credit facility and the senior unsecured term loan were guaranteed by three Mexican affiliates of TC Energy Corporation.
The borrower is expected to use the loan proceeds to (a) refinance existing intercompany debt and (b) develop and construct the Transportadora de Gas Natural de la Huasteca (TGNH) Southeast Gateway Pipeline.
The TGNH Southeast Gateway Pipeline is a $3.9–$4.5 billion offshore natural gas transmission project designed to transport 1.3 billion cubic feet per day (Bcf/d) of natural gas to the central and southeast regions of Mexico, including Veracruz and Tabasco.
The project includes three pipelines: the Tamazunchale pipeline, the Tula–Villa de Reyes pipeline, and the Tuxpan–Tula pipeline.
The Southeast Gateway section specifically is a 715 km subsea pipeline extending from Tuxpan, Veracruz, to Coatzacoalcos and Paraíso, Tabasco, in the Gulf of Mexico.
Construction of the Southeast Gateway Pipeline began in late 2023, and the project was completed in May 2025, approximately 13% under its original budget. Commercial operations (i.e., tolling) commenced on June 27, 2025.
The project is implemented under a 30-year contract between TC Energy and the Comisión Federal de Electricidad (CFE), Mexico’s state-owned power utility.
Under the terms of the agreement, CFE holds a 15% equity interest in the TGNH system, which will increase to approximately 49% upon contract expiration in 2055.
Staff Comments
- TC Energy Corporation is a leading North American energy company that develops and operates energy infrastructure in Canada, the United States and Mexico. It was the first private-sector company to construct and operate natural gas pipelines in Mexico.
- Latham & Watkins as well as Ritch Mueller served as legal counsel to the lenders. White & Case served as legal counsel to the project sponsor.
- White & Case indicated that 15 lenders participated in the deal. However, reports only name 13 lenders that participated. This discrepancy warrants further investigation.
Sources & References
- IJInvestor Awards 2023 – Refinance Award
- LatAm
- TC Energy Mexican Natural Gas Pipelines (2928KM) Refinanicing 2023
- Deal of the Year 2023: the full shortlist
- Mexican oil and gas pipeline group gets US$2.3 billion financing
- White & Case Advises TC Energy Corporation on a US$2.3 billion deal to refinance TC Energy’s Mexican natural gas pipelines
- TC Energy Quarterly Report to Shareholders (2nd Quarter)
- TC Energy 2023 Management's discussion and analysis
- Southeast Gateway Pipeline
- Mexico
- TC Energy Completes Major Mexico Pipeline
- Expects to Launch Operations by End of May
- TC Energy commences collection of tolls on Southeast Gateway pipeline
- Southeast Gateway Project
- Latham & Watkins Advises on US$2.3 Billion Credit Facilities for TC Energía Mexicana
- TC Energy and Mexico's Comisión Federal de Electricidad announce a first-of-its-kind strategic partnership to develop world-class energy infrastructure in Mexico Loan applications and disbursements are still being received and processed as the projects continue to evolve. Ongoing monitoring and evaluation are in place to ensure project continuity.
All Grantees
TC Energía Mexicana S. de R.L. de C.V.
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