Mexico Seizes Air Liquide's Hydrogen Plant at Pemex Refinery

(Reuters) — Mexico expropriated a hydrogen plant at a Pemex state oil refinery that a previous administration sold to French firm Air Liquide, the government announced in an official gazette on Thursday.

Mexican officials ordered a temporary occupation of the facility in December and in February declared the U-3400 unit at Pemex's Tula refinery in Hidalgo state a public good, preparing for its formal expropriation.

The decree calls on Pemex to compensate Air Liquide, but does not detail the amount. Paris-based Air Liquide did not immediately respond to Reuters' request for comment.

Oil refineries use hydrogen to reduce the sulfur content in petroleum products, especially diesel, and Mexico's government had cited risks to motor fuels production at the Tula refinery due to the third-party supply of hydrogen.

The government of President Andres Manuel Lopez Obrador has stressed the need to cut reliance on imports and ensure the country's energy sovereignty, concentrating industrial control in the hands of Pemex as well as state power company CFE.

Under his predecessor, however, Pemex's refining arm had signed a 20-year contract with Air Liquide in 2017 to supply hydrogen for Tula's operations in a bid to lower costs and improve efficiency.

The Tula facility, located in central Hidalgo state north of the Mexican capital, is Pemex's second-largest refinery currently in operation.

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