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Mexican CFE seeks arbitration over IEnova's 27 bcm/year gas pipeline

Mexico's Federal Electricity Commission (Comision Federal de Electricidad, CFE) has requested arbitration over the Sur de Texas-Tuxpan gas pipeline built by TransCanada (now renamed TC Energy) and IEnova in Mexico. The CFE is seeking to renegotiate terms related to transport services and to obtain reimbursement for some payments on the US$2.5bn construction contract, awarded in June 2016 by the previous government.

The 800 km-long gas pipeline project will deliver 2.6 bcf/d (nearly 27 bcm/year) of gas, from offshore gas fields in the Gulf of Mexico, at the border point near Brownsville, Texas to Tuxpan, in the state of Veracruz. Construction was completed earlier in June 2019 but CFE still has to issue a notification acknowledging the completion of works for operations to begin. Commissioning could also be delayed by the potential arbitration process. The gas pipeline will supply gas to two gas-fired power plants in the states of Tamaulipas and Veracruz, as well as other regions in the east, center and west of the country thanks to an interconnection with the Tuxpan-Tula gas pipeline.