Energia Mayakan, a subsidiary of French utility group Engie, has signed an agreement with Mexico's state-owned utility Comisión Federal de Electricidad (CFE) to expand the Mayakan gas pipeline system.

The US$2 billion project aims to ensure the transportation of natural gas required by the Yucatan Peninsula for energy generation.

The expansion of the Mayakan gas pipeline will effectively double its transportation capacity, from 250 million standard cubic feet per day to 567 MMcf/d, through the construction of over 700 kilometres of new pipeline.

It will also facilitate interconnection with the Puerta del Sureste, another gas pipeline project, thereby enhancing the region's access to natural gas transported from Texas in the United States.

Additionally, CFE is constructing two combined cycle power plants on the peninsula, the 499-megawatt Mérida IV, and the 1,020MW Rivera Maya. These facilities are deemed crucial for meeting the energy demands in the region and supporting its industrial development.

Engie plans to connect with its existing Energia Mayakan natural gas pipeline, a 780-kilometre pipeline that transports natural gas from Ciudad Pemex in the state of Tabasco, to Valladolid in the state of Yucatan, and to industrial and tourism users in the state of Quintana Roo.

Most of the pipeline's capacity is reserved for CFE under a 243 million cubic feet per day contract that serves five combined cycle and thermoelectric power stations in the states of Campeche and Yucatan. A further 7 million cf/d of transport capacity is reserved for gas traders operating in the region.