Atco Seeks Partners for Mexico Projects in Energy OpeningAdam Williams
Atco Ltd. is looking for partners in Mexico as it positions itself to tap the $5 billion in pipeline and power projects to be offered as part of the country’s energy industry opening.
The Calgary-based company has been in talks with as many as eight prospective partners as state-owned Comision Federal de Electricidad prepares to auction projects through 2015, James Delano, who heads Mexican operations, said in an interview yesterday.
“We didn’t come here to work alone,” Delano said at his Mexico City office after Atco agreed to build a $50 million pipeline in its first venture in the country. “It’s important for us to work with someone who knows the country well.”
The company that relies on Canada for about 80 percent of revenue is looking for growth opportunities in Mexico as President Enrique Pena Nieto plans to install 10,000 kilometers (6,215 miles) of pipelines and 18 new projects for natural gas transport in the next four years. Atco’s hares are down 3 percent in Toronto this year after doubling in value in the previous four years.
Atco will compete with Infraestructura Energetica Nova SAB, a unit of Sempra Energy, and TransCanada Corp., which both operate pipelines in Mexico. Shares fell 0.5 percent to C$45.28 at the close in Toronto.
The company is interested in developing a pipeline that connects El Encino and La Laguna in northern Mexico, Delano said. It will complete construction on its Hidalgo pipeline between June and October next year and is considering another project of similar size north of the town of Tula, he said.
Pena Nieto announced plans in April to invest 7.75 trillion pesos ($571 billion) in infrastructure and energy investment by 2018 as Mexico allows private companies to produce oil and generate electricity.
“The focus in Mexico is to work here for the long-term,” Delano said. “We didn’t just come for one project. We came to develop a Mexican company.”