Mexico to Cancel South Texas-Tuxpan Gas Pipeline

Photo: Quinten de Graaf/Unsplash


Mexico’s government has announced its intention to revoke permits from Ienova-TC Energy for the operation of the South Texas-Tuxpan gas pipeline, one of the most important pipelines in the nation, that stretches across 689 kilometers of the country’s federal maritime zone.

“It is not feasible to continue granting said authorization, until (Ienova) proves due compliance with the conditions of the title,” said the Secretariat of Communications and Transportation (SCT) on the permit, which was issued from 2017 until May 2022.

Infraestructura Marina del Golfo (IMG), the group behind the pipeline, allegedly did not pay the government a guaranteed yearly endowment, which should correlate to 7.5 percent of the value of the authorized product.

Back on March 18, IMG accused the government of trying to revoke its permit “in a very summary manner.”

Between IMG, Ienova and TC Energy, the three parties invested over $2.6 billion to build the pipeline, and already modified the tariff scheme in 2019 to further compensate Mexico’s state-owned Federal Electricity Commission (CFE).

The pipeline in question imports 26 percent of Mexico’s gas from the United States, some 5.68 million cubic feet of gas per day based on numbers from last February.

The pipeline was given to the energy consortium following a 25-year tender by the CFE, though after the project’s cancellation, will likely be given back to the state-owned energy company as part of Mexican President Andrés Manuel López Obrador’s quest to de-privatize the country.

…April 20, 2021


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