Mexico announced it will begin the building of Cuxtel 1, a 16 kilometre pipeline that will supply natural gas to the Yucatan region, comprising the states of Campeche and Quintana Roo, to produce cheaper electricity. The $25 million project will be built by the multinational electric utility company Engie. Currently, Yucatan generates power at five plants with natural gas from Nuevo Pemex, a processing centre in neighbouring Tabasco owned by the State oil company. With more gas supply allowing the Peninsula to generate more electricity locally, a reduction in transmission constraints may significantly lower power prices. At first stage, Cuxtal I will connect to the national system Sistrangas with the 780 kilometre long Mayakan pipeline (also owned by Engie). The future plan is to extend the pipeline for another 158 kilometres to take gas to the Cancun area.