US-based NET Midstream has announced that its wholly-owned subsidiary NET Mexico Pipeline will construct a new 199.5km long and 42in wide natural gas pipeline system from Eagle Ford Shale region in Texas, to the border of Texas and Mexico.

The financial terms of the deal were not revealed.

NET Mexico will transport gas from the Agua Dulce Hub in Nueces County, Texas to a point near Rio Grande City, Texas in Starr County.

NET co-president Joe Gutierrez said the company is building the pipeline to meet the growing demand of natural gas in Mexico.

"We look forward to this exciting new partnership with MGI and PEMEX Gas," Gutierrez added.

"NET Mexico is a natural next step in our pipeline system, as we connect abundant gas supply from the Eagle Ford Shale to expanding power generation and industrial markets in Mexico."

Mexico’s state-owned gas company Pemex Gas y Petroquimica Basica’s subsidiary MGI Supply has supported the system with a long term firm gas transportation agreement.

Under the agreement, the pipeline will supply up to 2.1 billion cubic feet per day of natural gas.

The new pipeline system is expected to begin operations in December 2014.

NET Midstream is a wholly-owned subsidiary of NET Holdings Management, a privately held natural gas midstream and marketing company.