“AMLO Directs Mexico’s CFE To Seek Renegotiation Of Natural Gas Supply Contracts”, 14th February 2019

Mexican state power utility Comisión Federal de Electricidad (CFE) will seek to renegotiate the take-or-pay clauses of contracts that it holds with natural gas pipeline developers, CEO Manuel Bartlett said Monday. The expansion of the pipeline grid, which mostly occurred under the previous government, was meant to facilitate a massive shift from liquid fuels to natural gas as a cleaner and cheaper power generation source, and to take advantage of Mexico’s proximity to cheap and abundant shale gas produced in the United States. However…President Andrés Manuel López Obrador…has since indicated that CFE will instead prioritize the modernization of the country’s existing hydroelectric, diesel, fuel oil and coal-fired plants to keep up with rising power demand…López Obrador assured reporters that, “In no way will [the restructuring] be done by force. We want it to be done by voluntary participation,” and said that the government will call on companies to work out a “reconciliation plan to repair the damage.” The press conference also included the reading…of a list of former public officials in Mexico who contributed to what he called “the destruction” of CFE in order to benefit private enterprise…