Deal Reached In Mexican Natural Gas Pipeline Dispute

Published: Tuesday, August 27, 2019 - 3:27pm

Mexico’s June announcement that it wanted to review a number of natural gas pipeline contracts rattled investors. But this week a deal was announced. 

That deal affects two pipelines that carry U.S. natural gas through Sonora, Arizona’s neighbor to the south, as well as several others across the country.

Mexican officials had criticized elements of the contracts that allowed for payment when gas wasn’t flowing for reasons out of the companies’ control.

Mexican President Andres Manuel Lopez Obrador, or AMLO, said the new arrangements would save the federal energy utility $4.5 billion over the life of the contracts.

Carlos Slim, whose company Carso is behind a pipeline running from Chihuahua to Sonora, praised the deal at AMLO’s Tuesday press briefing.

“The significance of these gas pipelines as a part of a great national infrastructure es that we can access the cheapest gas in the world in Texas, where we already have connections,” the billionaire said.

San Diego-based Sempra Energy, one of whose two affected pipeline projects is in Sonora, described the deal as "mutually agreeable."

"The Sur de Texas-Tuxpan and Guaymas-El Oro pipelines are among Mexico's most important infrastructure projects, bringing more reliable supplies of clean U.S. natural gas to Mexico to help meet the growing energy needs of the country for generations to come," the company wrote in a Tuesday release.

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