A pipeline whose inauguration had been held up by a dispute between contractors and the Federal Electricity Commission (CFE) has begun sending natural gas to Mexico from Texas, the Mexican company IEnova announced on Tuesday.

The South Texas-Tuxpan pipeline has a capacity to transport 2.6 billion cubic feet of natural gas a day, representing an increase of 40% in Mexico’s natural gas supply. The gas will be used for electricity generation.

The pipeline, built by IEnova and the Canadian company TC Energy, had been ready to start moving gas in July but the start of operations was delayed by a CFE initiative to renegotiate the contracts, which were signed before President López Obrador took office.

On August 27, López Obrador announced that the government had reached an agreement with the companies that would reduce the burden on the public purse by US $4.5 billion and extend IEnova’s concession for 10 years.

In a statement sent to the Mexican Stock Exchange, IEnova celebrated the agreement and noted that the pipeline was built with a US $2.6-billion investment.

“These agreements satisfy the interests of both parties, and allow a benefit for the CFE, maintaining the integrity of the contracts,” they said. “IEnova reiterates our commitment to keep investing in Mexico to strengthen the country’s energy infrastructure, and contribute to national development.”

Source: El Financiero (sp), La Política Online (sp)