IEnova Denies CFE Claim it Sought Arbitration for Pipeline Project

MEXICO CITY - Sempra's Mexican energy infrastructure subsidiary, IEnova, denied that it recently initiated arbitration against state-owned utility CFE in relation to the company's Guaymas-El Oro natural gas pipeline project as it awaited an invitation for further discussions.

In a statement, IEnova, accused CFE of falsely stating the company pursued international arbitration and said it would seek to resume discussions with CFE and Mexican regulators.

"IEnova declares that the following statement made by CFE at (Friday's) press conference is incorrect: 'While we waited with the best intention to initiate a renegotiation, IEnova moved forward and filed an arbitration demand against CFE.'

"Since February 13, 2019, the date on which our first meeting with the Chief Executive Officer of CFE was held, IEnova has been waiting for an invitation to continue the discussion," according to IEnova's statement.

The CFE is seeking to negotiate “fairer” terms for a number of pipeline contracts signed by the previous government which President Andres Manuel Lopez Obrador has questioned, suggesting they may have been too costly for the state.

"It is important to point out that an arbitration was initiated on February 15, 2018, during the previous administration, to clarify the interpretation of one clause of the Guaymas‐El Oro pipeline contract," IEnova said

"IEnova reiterates its commitment to continue promoting the development of energy infrastructure that contributes to the country's growth and the well-being of the Mexican people," it said.

The 510 Mmcfd Guaymas-El Oro pipeline is the downstream segment of IEnova's Sonora Pipeline in western Mexico, which receives gas imports from Sierrita Pipeline at Sasabe, Arizona.  The segment, which has been in force majeure due to Yaqui indigenous opposition, would transport gas to CFE power-generation plants in Mexico's northwestern region. 

– P&GJ Staff and Wire Report

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