COMISION FEDERAL DE ELECTICIDAD: The CFE Achieves A Saving of 4,500 Million Dollars in Renegotiation of Gasoduct Contracts

Comision Federal de Electricidad issued the following announcement on Aug. 27.

President Andrés Manuel López Obrador announced that a beneficial agreement for the nation was reached by renegotiating the gas pipeline contracts between the Federal Electricity Commission (CFE) and the construction companies. The agreement means a saving of 4,500 million dollars for the CFE and guarantees the gas supply for the electrical industry.

During the morning conference on Tuesday, the president stressed that the agreement was possible because the businessmen showed willingness and willingness to dialogue and that legally the contracts had been signed with harmful conditions for public finances. In addition, he recognized the firm and proactive role of Manuel Bartlett Díaz, General Director of the CFE.

At the same time, Bartlett Díaz explained that in the renegotiation with the companies Grupo Carso, IEnova and TC Energía, the CFE obtained benefits such as: transparent tariffs in the natural gas transport service, which reflect real costs, fixed tariffs leveled through the time, balanced agreements on fortuitous and force majeure cases, and withdrawal of the parties from any legal action.

He pointed out that the agreement will allow CFE to commercialize, through its subsidiaries CFEnergía and CFE Internacional, about 8.2 billion cubic feet of natural gas daily, of which 63% will go to the CFE generating plants and 37% for the national industry

"The agreement between the CFE and the transport companies is definitive, reasonable and balanced. It will allow the transport of natural gas for the generation of electricity and the development of the country. The concept of tariff ceases to be an investment rate to be a transport tariff for gas to the CFE. This lowers the rate, the concept is changed and companies are allowed to invest in pipelines, "said the CFE Director General.

The first gas pipeline to enter into operation will be the South Texas-Tuxpan marine gas pipeline, with a capacity of 2.6 billion cubic feet per day. This pipeline will carry gas to more than 14 power generation plants and will support the national industry with 1,040 million cubic feet per day.

During his participation, businessman Carlos Slim said the negotiations were cordial, and thanked the President for his personal participation in the conciliation table.

"Among what we negotiated with the Federal Electricity Commission was to make the use of gas pipelines more functional, so that when they are not being used, income can be obtained by renting to third parties, with a good income of up to 50% for the CFE "explained the businessman.

Miguel Santiago Reyes, Director of CFEnergía clarified that the extension of the term in the renegotiation of the contracts did not mean an affectation for the CFE, but on the contrary, it was accepted because the low rates, due to the volume or the term, guarantee access to the natural gas not only for 25 but for 30 or 35 years.

Carlos Salazar Lomelín, president of the Business Coordinating Council (CCE), acknowledged that dialogue was privileged instead of dissent and discussion and made a public recognition "to the work of Mr. Bartlett, in which, defending the legitimate interests of the Federal Commission de Electricidad has achieved that 'win-win' ".

"We won because the cost of the tariffs on gas transportation is reduced and this will have an impact on the production of electric power with less costs and not increasing rates. We also win because we avoid a lawsuit that would have meant going to international courts, that it would generate an atmosphere of distrust towards the government and towards Mexico, "said the president of the Republic to end the conference.

On July 8 a conciliation table was installed for the renegotiation of contracts. All parties were willing to discuss and reach joint agreements. During the meetings the proposals of the CFE and the companies were analyzed. The private secretary of the President of the Republic, Alejandro Esquer Verdugo, participated as observers; the president of the Mexican Business Council (CMN), Antonio del Valle Perochena; the president of the CCE, Carlos Salazar Lomelín; and the general director of Public Policies of the CCE, Javier Treviño Cantú.

The CFE continues the negotiation process with Fermaca and expects to announce a positive agreement in the near future.

Original source can be found here.

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Comision Federal de Electricidad

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