Distributors Investigated
Standard is Amended
Joint Ventures
On January 30 2001 Mexico's Energy Regulatory Commission extended the period of time in which restrictions will apply to Pemex's ability to transport natural gas, as well as its ability to sell natural gas under the 'first-hand sales' rules.
The 'Chinese wall rules' applicable to Pemex's natural gas transportation and marketing departments were approved by the commission in January. However, Pemex is still banned from selling natural gas at points other than its gas processing plants until a price catalogue and credit guidelines are approved and published by the commission. The first-hand sales rules, on the other hand, require Pemex to confirm with the commission gas sales to current users and do not allow Pemex to execute new gas supply agreements until the end of the transitory period.
On February 13 2001 the commission also approved Pemex's request to enter into domestic natural gas supply agreements for the period between January 1 2001 and December 31 2003, for pre-determined amounts at a fixed price of $4 million British thermal units. The fixed price first-hand sales rules contract is only available to Pemex's current users until February 22 2001.
On January 31 2001 Mexico's Federal Competition Commission published the commencement of an antitrust investigation against liquid propane gas distributors and marketers in the Federal Register. By the beginning of March the Competition Commission announced that preliminary evidence of the existence of monopolistic practices had been found and recommended the implementation of preventive measures. Consequently the Ministry of Energy has imposed price caps on liquid propane gas marketing and distribution services.
On April 11 2001 the Energy Regulatory Commission published a resolution modifying the Mexican Official Standard NOM-007-SECRE-1999 for natural gas transportation in the Federal Register. This long-awaited amendment introduces the following:
- express authorization for natural gas pipelines made of high or middle density polyethylene to be used for pressure equal to or lower than 685 kilo pascals;
- criteria to determine the location of the transportation system, and thereby determine the safety standards and width of the right of way required; and
- a reduction of the minimal width of the required right of way, especially in urban areas, in order to facilitate the development of natural gas transportation in Mexico.
In April 2001 the governments of Canada and Mexico signed a letter of intent whereby the two governments agreed to establish a high-level working group. This group will recommend changes that need to be made to fortify the energy cooperation between both countries. The recommendations are expected to be reported within one year and the government of the United States is also expected to join these efforts. It is possible that some of the recommendations will focus on revising those chapters that deal with the energy industry within the North American Free Trade Agreement (Chapters 6, 10 and 15).
For further information on this topic please contact Rogelio López-Velarde at Lopez Velarde, Heftye, Abogados by telephone (+52 55 50 81 1424) or by fax (+52 55 50 81 1425) or by e-mail ([email protected]).
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