August 2019, Vol. 246, No. 8


Mexico’s CFE Looking to Renegotiate Several Pipeline Contracts

Mexican state power utility CFE said it try to negotiate a “fairer” resolution to contractual disputes with companies behind several pipelines yet to go into operation, and whose costs have been questioned by Mexico’s president.

President Andres Manuel Lopez Obrador earlier this year vowed to respect contracts signed under the previous administration for the infrastructure, but the loss-making CFE is hoping to secure better terms for the projects.

The dispute centers on seven projects undertaken by companies that include Mexican billionaire Carlos Slim’s infrastructure arm Grupo Carso, TransCanada Corp and Mexican energy firm IEnova, a unit of U.S. company Sempra Energy.

CFE spokesman Luis Bravo said the utility would set out plans to sit down with the firms.

“All the companies involved in the conflicts will be called in with the aim of negotiating as the president has said, and to follow up on talks that have already started. There have already been initial soundings with each of them,” he said.

The CFE had not ruled out pursuing international arbitration if necessary, but that was not its principal goal, he noted.

IEnova said it received an arbitration request from the CFE over a pipeline it had built in a tie-up with TransCanada, and that it was ready to continue dialogue with the state-run firm.

The president, who took office in December, has alarmed investors by canceling a partially built $13 billion new Mexico City airport, and with his commitment to infrastructure projects that are viewed skeptically by financial markets. P&GJ

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