The rating agency Moody’s and business groups have applauded the agreement reached between the federal government and three pipeline companies, declaring that the deal gives certainty to investors.
President López Obrador announced on Tuesday that the Federal Electricity Commission (CFE) had reached an accord with Carso, IEnova and TC Energy that will save the government US $4.5 billion.
Under the terms of the deal, Mexico will pay fixed fees to the companies to transport natural gas rather than ones that increase over time as stipulated in the previous contracts. On average, the CFE will pay the companies 28% less than they would have over a period of 25 years.
Moody’s analyst Roxana Muñoz said the agreement between the CFE and the pipeline companies is a “positive factor for the credit” of the latter because it brings certainty to their investments and ensure that the projects will continue to advance.
She said that even though a new tariff structure has been established and the length of the contracts between the CFE and the companies has been modified, “the return on investments won’t have a material impact.”
Mexican Employers Federation president Gustavo de Hoyos said on Twitter that the private sector should be encouraged by the agreement, while the Confederation of Chambers of Commerce, Services and Tourism (Concanaco) said it represents “a great step towards the equitable development of Mexico” because the availability of gas and electricity are crucial to investment growth in the industrial sector.
Concanaco chief José Manuel López Campos said in a statement that once the three companies’ pipelines are in operation, gas supply in Mexico will be guaranteed.
He said he was particularly happy that the Texas-Tuxpan pipeline will be the first to open as a result of the new agreement, asserting that its operation will benefit the Yucatán peninsula and the southeast of the country the most.
“. . . By having more natural gas, their [industrial] processes will be less costly and they will compete with other regions of the country,” López said.
The Texas-Tuxpan line, completed by TC Energy and IEnova in June, will open next week, CFE director Manuel Bartlett said.
The US $2.5-billion pipeline will increase Mexico’s capacity to import cheap gas from the United States by about 40%.
Running mostly underwater across the Gulf of Mexico between Texas and Veracruz, the pipeline has the capacity to move 2.6 billion cubic feet of natural gas per day.
Five other projects will be ready for operation at the midpoint of the government’s six-year term, Bartlett said.
The government has failed to reach a deal with Mexican company Fermaca, builder of the La Laguna-Aguascalientes and Villa de Reyes-Aguascalientes-Guadalajara pipelines, but López Obrador said that negotiations are ongoing.
“We’re still talking, we have to be patient . . . The disagreement is basically the issue of tariffs, [and] we look forward to an agreement soon.”
Source: Milenio (sp)
