Following a long consultation process, the Energy Regulatory Commission (CRE) recently published the general administrative provisions on hydrocarbon pipeline transportation and storage services in the Federal Register.

The new provisions apply to pipeline transportation and storage services for crude oil, non-processed natural gas and dry natural gas (ie, hydrocarbons). The gathering and displacement infrastructure for hydrocarbons within exploration and production contract areas (or allocation areas) is excluded from the scope of the new provisions.

Among other things, the new provisions establish:

  • two distinct modalities of service – contract reserve (consisting of capacity reserve contracts) and common use (relating to services not linked to a capacity contract);
  • the minimum content of general terms of service applicable to each system holding a CRE permit;
  • capacity secondary markets and allocation of capacity;
  • open access obligations and rules to enforce such obligations, including rules applicable to transportation and storage of products belonging to the permit holder or an affiliate thereof, which may or may not include the right to market hydrocarbons to third parties;
  • the obligation for current and future permit holders to launch open seasons in order to allocate available capacity in respect of new projects or projects to be expanded or extended;
  • specific requirements for open-season processes, including the requirement for permit holders to obtain CRE approval for any calls to launch open seasons; and
  • rate calculation and regulation principles, as well as metering and quality provisions in respect of services rendered.

A key element of the new provisions is the establishment of a framework under which private exploration and production operators may be granted access to Mexican Petroleum's (Pemex) hydrocarbon midstream transportation and storage infrastructure, which proves critical in light of the recently awarded exploration and production contracts and those to be tendered and awarded in the coming years.

Regarding the open-season provisions, any developer of a hydrocarbon pipeline transportation or storage system will be required to launch an open-season process before applying to the CRE for a permit. The regulations set specific requirements and terms applicable to the open season, on the understanding that the call and its publication are subject to CRE approval.

Within 90 calendar days of the effective date of the new provisions, Pemex (including its affiliates) must:

  • submit a detailed inventory of its existing facilities to the CRE;
  • submit a detailed inventory of all existing midstream assets related to crude oil and non-processed natural gas to the CRE;
  • submit its proposed general terms of service to the CRE, on the understanding that any special conditions and negotiated rates agreed before publication of the new provisions will remain effective; and
  • ensure that its electronic bulletin and mechanisms guaranteeing open access to third parties are operational.

The new provisions became effective on the next day after their publication in the Federal Register.

For further information on this topic please contact Rogelio López-Velarde, Amanda Valdez, Daniela Monroy or Diego Campa at López Velarde, Heftye y Soria by telephone (+52 55 3685 3334) or email (rlopezv@lvhs.com.mx, avaldez@lvhs.com.mx, dmonroy@lvhs.com.mx or dcampa@lvhs.com.mx). The López Velarde, Heftye y Soria website can be accessed at www.lvhs.com.mx.

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