Register with us today

and in less than 60 seconds continue your access to:Latest news headlinesAnalytical topics and featuresCommodities videos, podcast & blogsSample market prices & dataSpecial reportsSubscriber notes & daily commodity email alerts

Already have an account?

Log in to register

Forgot Password

Please Note: Platts Market Center subscribers can only reset passwords via the Platts Market Center

Enter your Email ID below and we will send you an email with your password.


  • Email Address* Please enter email address.

If you are a premium subscriber, we are unable to send you your password for security reasons. Please contact the Client Services team.

If you are a Platts Market Center subscriber, to reset your password go to the Platts Market Center to reset your password.

In this list
Natural Gas

Lopez Obrador announces resolution to disputes between CFE, gas pipeline operators

Electric Power | Natural Gas | Oil

Mexico Energy Reform

Natural Gas | Oil

Platts Wellscape P2P

Commodities | LNG | Natural Gas | Marine Fuels | Tankers | Banking

18th Annual LNG Conference

LNG | Natural Gas | Natural Gas (North American)

Sur de Texas-Tuxpan injections decline to nominal levels

Lopez Obrador announces resolution to disputes between CFE, gas pipeline operators

Contract disputes between the Mexican government and natural gas pipeline operators are reportedly close to an end, indicating that the long-awaited Sur de Texas-Tuxpan marine pipeline could begin operating later this month.

Not registered?

Receive daily email alerts, subscriber notes & personalize your experience.

Register Now

State-owned power generator CFE and private natural gas pipeline operators could finalize agreements to modify terms of the disputed contracts by this Thursday, Mexican President Andres Manuel Lopez Obrador said in a morning briefing to the public.

Arbitration in international court may be avoided for all seven pipelines, a process that TC Energy said could have extended into early 2021.

According to Lopez Obrador, a Mexican company came to resolutions first. The president did not specify a specific company or project name, but this may indicate that Grupo Carso or Fermaca may have set the tone. The companies accepted the dialogue and the revision of the conditions of the contracts presented by the CFE, Lopez Obrador said.

Pipeline operators had declared forces majeure amid unforeseen delays in pipeline construction, which were largely the result of conflicts with indigenous groups over land usage and ownership.

CFE owns the majority of the new pipeline capacity in question and has been forced to make capacity payments to Grupo Carso, IEnova, TC Energy and Fermaca for pipelines that were incomplete or delayed.

On June 24, just two weeks after the Sur de Texas-Tuxpan Pipeline (STTP) reached mechanical completion, CFE sent a request for arbitration over capacity payments made on the project to Marina del Golfo -- the joint-venture company owned by the pipeline's developers TC Energy and IEnova.

CFE's subsequent refusal to issue a proof of acceptance has delayed the startup of service on the project, stranding gas contracted for export in South Texas and leaving Mexico short on much-needed supply from the US.

In the meantime, CFE has hedged much of the lost supply from LNG imports. Lower global gas prices hovering around $4-$5/MMBtu have made imports of the super-cooled fuel less costly this summer compared with last.

IMPACT

The STTP system is the only pipeline among those in dispute that is complete and could start flowing natural gas following final closure of the contract negotiations.

Platts Analytics estimates that the marine pipeline could flow as high as 1 Bcf/d based on downstream connectivity and modifications. The STTP system will deliver gas to the Altamira V power plant, the 500 MMcf/d Monte Grange interconnect and the TC Energy Tamazunchale Pipeline at Naranjos.

The new pipeline, coupled with the Cempoala Compressor Station reversal project, should allow supply to flow into southern Mexico, an area that has been subject to shortages this year on falling domestic production.

-- John Hilfiker, jhilfiker@spglobal.com

-- J. Robinson, jrobinson@spglobal.com

-- Edited by Zac Aiuppa, newsdesk@spglobal.com

S&P Global Platts Global Energy Awards Nomination deadline: September 9, 2019

The S&P Global Platts Global Energy Awards, now in its 21st year, recognizes top performers -- industry leaders and innovators just like you. The awards program offers 18 categories both for business and individual achievement. It's simple and free to nominate.

For category details and to nominate: