Mexico Files Lawsuit Against Former State Power Utility Execs Over Texas Gas Deal

(Reuters) — Mexico's state-run power utility on Wednesday filed a breach of contract lawsuit in a Texas state court against two former executives of its U.S. arm, alleging they improperly awarded a lucrative gas supply deal.

The lawsuit, by a unit of Comision Federal de Electricidad (CFE), comes amid Mexican President Andres Manuel Lopez Obrador's efforts to redraw energy deals that he believes disadvantage CFE and state oil firm Petroleos de Mexico. Mexico has disputes with U.S. companies involving some $30 billion.

Guillermo Turrent and Javier Gutierrez, two former top executives of CFE International, awarded contracts to Texas-based WhiteWater Midstream LLC for a pipeline and gas supply that saddled the company with hundreds of millions of dollars in damages, alleges a lawsuit filed in Harris County District Court in Houston.

An attorney for the two men was not immediately available to comment.

A spokesperson for WhiteWater Midstream said it had not seen the lawsuit and had no immediately comment.

CFE International contracts obligated the company to pay WhiteWater Midstream "enormous sums for unneeded and overpriced natural gas and unnecessary pipeline costs," the lawsuit claimed.

One contract provides 1.5 billion cubic feet per day of natural gas, some of which is not needed and resold "routinely causing enormous losses" to the Mexican company. A related, long-term pipeline contract was unneeded and designed to help WhiteWater obtain outside financing, the lawsuit alleged.

The two misled CFE's board by failing to disclose prior business dealings with WhiteWater executives, CFE claimed in a breach of contract and breach of duty. The lawsuit seeks at least $1 million in damages.

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