Public-Private Sector Negotiations Reinitiated

The Mexican government and the private sector have restarted talks to boost investment in oil, gas and energy. These negotiations started after the Mexican government announced five new projects worth an approximate US$5 billion, reported GNI.

In October, Mexico’s government presented the new infrastructure investment package that includes 39 projects. This first package is part of the Agreement for the Economic Recovery plan and represents a total investment of MX$297.3 billion (US$14.6 billion) aimed at the communications and transportation, energy, water and environment sectors, reported MBN.

According to GNI, these five projects are part of the new infrastructure plan that aims to reactivate the Mexican economy and include the participation of private companies in national projects. Moreover, the private sector has shown interest in five energy projects, four managed by PEMEX and one by CFE.

PEMEX will administrate two petrochemical projects and two refinery upgrades in Tula and Cadereyta. Furthermore, the Salina Cruz natural gas liquefaction project will be overseen by CFE and The Integral Port Administration (API), which has an investment of US$1.2 billion, reported NGI.

It is unsure how the private sector will participate in these five projects. Nevertheless, there is a high investment uncertainty in Mexico due to comments from President Lopez Obrador that have deterred investment.

However, this week Carlos Salazar, Head of Mexico’s Business Coordinating Council (CCE), assured that López Obrador understands the role the private sector has for the development of the country and the importance of a strong communication with investors, reported Reuters.

The second package of infrastructure investments between the government and the private sector is worth US$10 billion. The package includes the biggest privately funded energy sector project in Mexico, which is the Liquefied Natural Gas (LNG) export plant for US-based Sempra Energy. This project has an investment totaling US$2 billion, reported Reuters.

The government aims to connect Salina Cruz and Jaltipa by a natural gas pipeline, which would give access to PEMEX production and the gas from Texas via the Sur de Texas-Tuxpan marine pipeline. Besides these pipelines, there are two other LNG projects planned for Mexico’s Pacific Coast that seek to import US gas to re-export to the Asian markets, reported Reuters.

MPL CCO Sarah Bairstow said Mexico offers great economic and regulatory conditions in the US Gulf Coast. Therefore, projects are stronger and have greater opportunities for success, reported NGI.