Sunday, August 14 2022 Sign In   |    Register
 

News Quick Search


 

News


Front Page
Power News
Gas News
Today's News
Yesterday's News
Week of Aug 08
Week of Aug 01
Week of Jul 25
Week of Jul 18
Week of Jul 11
By Topic
By News Partner
News Customization
Feedback

 

Pro Plus(+)


Add on products to your professional subscription.
  • Energy Archive News
  •  



    Home > News > Gas News > News Article

    Share by Email E-mail Printer Friendly Print

    Government loads the dice in favor of Pemex and CFE on natural gas


    June 27, 2022 - CE Noticias Financieras

     

      ACOLMAN, ESTADO DE MƒXICO, 12OCTUBRE2009.- La Central Termoelectrica del Valle de Mexico, compuesta por tres unidades, proporcionando al Sistema Interconectado Nacional la energ'a electrica requerida. Est‡ es operada por personal de la Comisi--n Federal de Elecricidad (CFE).FOTO: MARIO NULO/CUARTOSCURO.COM

      The Ministry of Energy (Sener) intends to put an end to the competitive natural gas market in Mexico by requiring the National Natural Gas Control Center (Cenagas) to stop selling capacity in the National Natural Gas Transportation System (Sistrangas) to marketers other than Petróleos Mexicanos (Pemex) and the Federal Electricity Commission (CFE).

      Thus, a dozen of these different marketers, such as Shell, BP and Trafigura, among others, would have to change their gas acquisition contracts from their primary sellers to a contract with one of the two state-owned energy companies. The Energy Regulatory Commission (CRE) is "urged" to change the terms and conditions of the natural gas purchase contract.

      This must occur within a "reasonable" term of less than 60 days, but even if the CRE does not have time to change the rules, Cenagas must already (at the request of Sener) stop lending them capacity unless they prove that they acquired the gas from Pemex or CFE.

      This constitutes a tied sale: the transfer of transportation capacity only if the molecule is purchased from the State companies. It is the return to monopoly, even of imported gas, not only of national gas in its production, as before", said Miriam Grunstein, an analyst of the energy sector.

      In the middle of this month, the head of the Ministry of Energy, Rocio Nahle, sent an official letter to the CRE and Cenagas with instructions to modify regulations and contracts for the transportation of natural gas from Sistrangas. This, in order to use the excess capacity of CFE in its pipelines, which the company is paying for without being used, according to the document.

      In the case of the United States, the import capacity is 8,200 million cubic feet per day, of which 41% is used, while in Mexico the CFE has transportation contracts for 18,000 million cubic feet per day and 68% is used.

      "This results in CFE expenditures to be recovered equivalent to 10,000 million pesos per year", states Nahle's document. The Sistrangas has a capacity of 5,900 million cubic feet per day, of which 2,900 correspond to the CFE and 800 million to Pemex. The private companies have almost 1,700 million reserved, of which they use about 1,300 million. But in addition, there are other 4,200 million cubic feet in different branches in the country, but although they are not part of the exhortation, they will be affected, because the gas transportation ends up working as a network.

      Legality of the exhortation

      Eduardo Prud'homme, former head of the Technical Management and Planning Unit of Cenagas, now a consultant on energy matters at Gadex, told El Economista that de facto there is no obligation for the instruction of the Energy Secretariat to be carried out, but that given the election of commissioners of the CRE - where all but one were elected by the current administration and without the approval of the Senate due to lack of time for agreements - and Cenagas is still a decentralized agency of the Executive, both a requirement and an exhortation are basically orders.

      "What if it is legal? Yes, the Ministry of Energy has the obligation to conduct the national energy policy, but the Hydrocarbons Law specifies that in the matter of natural gas it must do so through open and non-discriminatory access, which promotes competition in the networks, so yes, this policy violates the law", the specialist assured.

      This will cause marketers to change their contracts so as not to lose their business, transferring the additional cost generated by contracting with Pemex or CFE to end customers -who in turn will decide whether to stay with that marketer or go directly to the state-, said Prud'homme.

      Amparos

      Regardless of the fact that the practice of tied sales should generate a reaction from the Cofece, within its obligations to denounce this type of practices contrary to its legal principles, the marketers may have already initiated amparo proceedings, since it is necessary to violate rights acquired individually towards the marketers and Cenagas itself has already sought marketers to explain the situation to them.

      For the time being, Efraín Téllez, partner of Enix, specialist in markets and regulation of the energy sector and former director of Economic Analysis of the CRE, explained to El Economista that the measure applies to contracts that will be renewed, which happens in the summer. As soon as the CRE tries to modify the terms and conditions, the bulk of the legal processes will follow.

      "Basically they are closing the natural gas market and it is in order not to lose control of the capacity, capacity that they could sell and make liquid, obtain resources in the long term with firm basis (long term) contracts, but they do not do it, it is about having control, even though they do not have the capacity or the logistics to operate it," he said.

      karol.garcia@eleconomista.mx

    TOP

    Other Articles - Generation


    TOP

       Home  -  Feedback  -  Contact Us  -  Safe Sender  -  About Energy Central   
    Copyright © 1996-2022 by CyberTech, Inc. All rights reserved.
    Energy Central® and Energy Central Professional® are registered trademarks of CyberTech, Incorporated. Data and information is provided for informational purposes only, and is not intended for trading purposes. CyberTech does not warrant that the information or services of Energy Central will meet any specific requirements; nor will it be error free or uninterrupted; nor shall CyberTech be liable for any indirect, incidental or consequential damages (including lost data, information or profits) sustained or incurred in connection with the use of, operation of, or inability to use Energy Central. Other terms of use may apply. Membership information is confidential and subject to our privacy agreement.