Mexico offers growth for TRP

Article Excerpt

TRANSCANADA CORP. $59.47 (Toronto symbol TRP; Shares outstanding: 799.4 million; Market cap: $47.9 billion; TSINetwork Rating: Above Average; Dividend yield: 3.8%; www.transcanada.com) has formed a joint venture to build facilities in Mexico to store and distribute gasoline, diesel and jet fuels. The project includes a terminal on the Gulf of Mexico and a 265-kilometre pipeline linking it to a new storage facility in central Mexico. TransCanada will own 50% of the operation. Its partners are Mexican firms Sierra Oil & Gas (40%) and Grupo TMM SA (10%).The project should cost $800 million U.S. TransCanada’s share is $400 million U.S. This investment has strong long-term appeal: Mexico has few refineries, so it has to import 55% of its gasoline; and teaming up with local firms helps cut the risk of expanding in Mexico. The partners plan to start construction in mid-2017 and to complete the project in 2019. TransCanada is a buy. buy…