NewsUSAThe CFE undertakes the search for international investors in the United States

The CFE undertakes the search for international investors in the United States

The Federal Electricity Commission (CFE) approached the US energy sector on Wednesday in a conciliatory tone, for the first time in four years. At a conference in the city of San Antonio, Texas, the general director of the CFE International subsidiary, Miguel Reyes, extended an invitation to investors and outlined the new strategy that will make Mexico an exporter of liquefied natural gas. “It will be a very good sign for all North American investors and for the real integration of North America, that now we can jointly develop much more planned projects,” Reyes said from behind the podium before a hundred attendees related to the industry. energy in the region.

CFE International, which Reyes heads, is a private CFE affiliate in charge of negotiating fuel contracts abroad. Its headquarters are in Houston, Texas, and it has become one of the largest natural gas traders in the region. Reyes explained that during the first years of the Administration of Andres Manuel Lopez Obrador, the Commission dedicated itself to renegotiating contracts signed under the presidency of Enrique Pena Nieto, which generated multimillion-dollar losses. In addition, he spoke briefly about the country’s economic history, which has led to a concentration of wealth that the current government seeks to reverse.

Reyes assured that Mexico wants to work with the private sector so that investments are sustainable and that “Mexico really is an increasingly balanced and less unequal country, but also, increasingly integrated in energy and economic development with the United States and Canada, and really build what is an alliance between the three countries”.

The conference, US-Mexico Natural Gas Forum, has been held every year since 2016, since the Pena Nieto Administration’s energy reform came into force, which opened the sector to private investors for the first time in 75 years. However, according to Reyes in his presentation, CFE International had not participated in this market since President Andres Manuel Lopez Obrador came to power. The president has taken actions to reverse a large part of his predecessor’s reform.

This is a key moment for CFE, since in July the governments of the United States and Canada began, separately, consultation processes with Mexico to resolve an energy dispute. The United States, Mexico’s main trading partner, alleges that Lopez Obrador’s policies violate the free trade agreement, known as TMEC. Two of the four contentious points have to do with the state company: the first, because the Secretary of Energy issued an official letter proposing that private companies be forced to buy natural gas from the CFE; the second, because Lopez Obrador wants to guarantee that the dispatch of electricity gives preference to the state company.

In the first of two presentations, Reyes shared the stage with executives from New Fortress Energy, Sempra Energy and TC Energy, companies with which CFE has managed to do business in the last six months. These started as disputes, Reyes said, before evolving into “strategic alliances.” The contracts signed with these companies are part of a new CFE plan to become an exporter of liquefied natural gas. The previous Administration, Reyes explained, left CFE with US natural gas purchase commitments that exceed the country’s total consumption, so they must resell the fuel. Considering the global geopolitical context, and Europe’s desire to reduce its energy dependence on Russia, Mexico designed a plan to sell gas abroad.

Reyes participated in the event a day after his predecessor, the former general director of CFE International, Guillermo Turrent, gave a presentation. The company, under the direction of Reyes, has sued Turrent in the US for a violation of his functions by having awarded “billions of dollars of unnecessary and overvalued contracts,” according to documents that are part of the case in a court in Texas. The beneficiary company, Whitewater Midstream, was founded by Turrent’s former colleagues.

Without referring directly to Whitewater, Reyes spoke of how the past administration unfairly awarded a vital contract for the supply of natural gas to Mexico. “I don’t want to talk about it anymore, rather than say that this company did not exist, it had no financial statements, no experience in the sector, nobody knew about it and now it has only one contract that is anchored that does not allow us to optimize [el uso de una importante infraestructura en Texas que pertenece a CFE]”, he mentioned.

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