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Mexico Reaches Deal with Private Gas Pipeline Firms

Associated Press

   MEXICO CITY - Mexico's president said Tuesday his government has
   reached a deal with private gas pipeline operators to solve a dispute
   over fees and payments.

   President Andres Manuel Lopez Obrador had accused private companies of
   taking unfair advantage of the country when the contracts were signed
   under previous administrations, in part because some contracts required
   the government to pay whether it received gas or not. He had ordered
   the contracts suspended, but started talks with the firms.

   Lopez Obrador acknowledged that the dispute with companies from the
   U.S., Canada and Mexico could potentially harm Mexico's reputation
   among investors.

   "We avoided a dispute that would have implied going to international
   tribunals, a dispute that would have taken years to resolve and which
   would have generated an atmosphere of mistrust toward the government
   and toward Mexico at a time when we need investment," Lopez Obrador
   said.

   In June, former Canadian Ambassador Pierre Alarie wrote "I am deeply
   concerned by the actions of the CFE (Federal Electricity Commission)
   and the signal they send that ... Mexico will not respect the gas
   pipeline contracts."

   The dispute involves seven pipelines, some of which are completed and
   some of which are blocked by court appeals or protests. In some cases,
   those projects have been blocked for months or even years. Mexico
   already had a reputation of being a place where rights of way are hard
   to secure, making infrastructure projects in general more expensive and
   difficult.

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