Mexico Expropriates Air Liquide-Operated Hydrogen Plant

Mexico's Ministry of Energy (SENER) states that the hydrogen plant at the Tula refinery in Hidalgo is a public utility. On Dec. 29, 2023, Mexico ordered the temporary occupation of Air Liquide's hydrogen plant. The plant is now operated by PEMEX's refining arm, PEMEX Transformación Industrial (PEMEX TRI), which will be responsible for compensating the company after the occupation.

In a decree issued this week in the Official Gazette of the Federation (DOF), SENER also indicates that the hydrogen plant was declared a public utility in favor of the state oil company. According to the decree, SENER estimates that the refinery's dependence on hydrogen provided by a third party "puts at risk" the production of gasoline and diesel at the facility.

Under that argument, SENER granted the request to expropriate the plant operated by Air Liquide. "The recovery of the U-3400 Hydrogen Plant located inside the Miguel Hidalgo Refinery will improve the refining margins of PEMEX TRI and contribute to national energy sovereignty," reads the document.

The decree adds that the construction of the U-3400 hydrogen plant in 1992 was necessary due to the demand for hydrogen for modernization of processes at the Miguel Hidalgo refinery in Tula, Hidalgo.

Air Liquide had been supplying hydrogen to the Tula refinery since 2017, when it paid around €50 million (US$54.5 million) to acquire and upgrade the plant. The Tula refinery houses one of Mexico's largest hydrotreaters, which uses hydrogen to remove sulfur from diesel and gasoline.

SENER says that Mexico does not have supply autonomy for hydrogen because there is dependence on a third party. The U-3400 Plant is the only hydrogen supply source for the Tula refinery process, "which puts at risk the main production of gasoline and diesel, for not having the input that allows it to be used in the productive process carried out at the refinery facilities."

PEMEX TRI must now perform the activities carried out by the hydrogen plant for the generation of clean fuels. 

PEMEX partnered with Air Liquide in 2017 for the latter to supply hydrogen for 20 years, in an attempt by the then Mexican government to reduce costs for the state-owned oil company.

When it reported on the temporary occupation of the plant at the end of December, the government mentioned that PEMEX TRI would compensate Air Liquide but the new announcement does not mention payment to the company.