A contract has been signed with Gasoductos del Noreste for the construction of a new pipeline in northern Mexico, state-owned oil giant Petroleos Mexicanos, or Pemex, said.

The 25-year contract with Gasoductos del Noreste, a unit of Grupo Gasoductos de Chihuahua, covers natural gas transportation services for the "Ramones Fase I" project, Pemex said in a statement.

The 48-inch pipeline will run 114 kilometers (nearly 71 miles), the state-owned oil company said.

The pipeline will start on the border with the United States near Camargo, a city in Tamaulipas state, and end in Los Ramones, a city in Nuevo Leon state, Pemex said.

The pipeline, which is expected to begin operating in December 2014, will have an initial capacity of 1 billion cubic feet per day, with capacity increasing to 2.1 billion cubic feet per day in late 2015 as more compressor stations are added, Pemex said.

The second phase of the project is expected to commence operation at the end of 2015.

The pipeline will open the way for a substantial increase in natural gas transportation capacity in west-central Mexico, Pemex said.

Pemex, which posted total revenues of $131.75 billion and had assets of $161.8 billion in 2012, is the world's No. 5 oil producer and accounts for about 40 percent of the Treasury's revenues. EFE