After months of negotiations, the Mexico president realized a major victory on Aug. 27 when he successfully convinced four companies to take big cuts in profits on natural gas pipelines contracts negotiated under old administration.
The deal brokered by President Andres Manuel Lopez Obrador and the state-run power utility company Federal Electricity Commission (CFE) could save taxpayers as much as $4.5 billion over time, according to a Wall Street Journal report. Mexico will pay the companies significantly less to import natural gas, which will mean a savings to the citizens.
The four companies the Mexico government had been negotiating with are Canada’s TC Energy, Carlos Slim’s Grup Carso, Sempra Energy’s iEnova and Mexico’s Fermaca. The renegotiated contracts could increase Mexico’s natural gas import capacity by 40%.
The agreements also end a dispute over the $2.5 billion South Texas-Tuxpan natural gas pipeline that was completed in June but has not been in operation. The South Texas-Tuxpan pipeline is an underwater natural gas pipeline between Texas and Veracruz, Mexico and is Mexico's first subsea pipeline. It was developed by the CFE and built by TC Energy Corp and iEnova.
The deal Lopez Obrador, the leftist who took office in December, and CFE reached with the four companies appears to be a significantly greater savings than $600 million in normal savings Mexico’s government was reportedly seeking during the last several days.
Recommended Reading
OFS Sector Loses Jobs, but Trade Org Says Growth Potential Remains
2024-05-08 - According to analysis by the Energy Workforce & Technology Council, the OFS job market may still have potential for growth despite a slight decrease in the sector in April.
Dividends Declared in the Week of May 6
2024-05-10 - Here is a selection of upstream, midstream and service and supply companies’ dividends declared in the past week.
Berntsen Joins Xcel as Executive VP, Chief Legal and Compliance Officer
2024-05-22 - Rob Berntsen is assuming the role from Amanda Rome, who had been in the position on an interim basis.
Riley Permian Increases Stake in West Texas Power JV with Conduit
2024-05-22 - Riley Exploration Permian increased its ownership in RPC Power, a JV with Conduit Power, to 50% from 35% and has agreed to sell up to 10 MMcf/d of natural gas as feedstock supply for the generation facilities as RPC plans to sell to ERCOT.
Upstream, Midstream Dividends Declared in the Week of July 8, 2024
2024-07-11 - Here is a selection of upstream and midstream dividends declared in the week of July 8.