The Federal Commission of Economic Competition (Coffee) finally issued his opinion on the new federal government strategy that conditions distributors to buy natural gas extracted from fields or imported only from Petróleos Mexicanos (Pemex) and the Federal Electricity Commission (CFE), warning that this will discourage the arrival of new competitors and will raise final fuel prices.
Through its legal attribution and as an autonomous decentralized body, the economic competition regulator maintained that in fact there are already risks in terms of competition and free concurrence since the publication of the Supply Guarantee Strategy for the optimization of capacity in the Transportation System and Integrated National Storage of Natural Gas (Strategy), established by the Secretary of Energy (Sener) in the trade SENER.100/195/2022three weeks ago.
He explained that in said official letter, it is established that users or those interested in receiving the natural gas transport service at the entry points of the Integrated National Natural Gas Transport and Storage System (Sistrangas), must certify that they receive the supply from of the productive companies of the State or its affiliated and subsidiary companies; and that the provision of the service is ensured by contracting transportation capacity in pipelines with any of the state-owned energy companies.
In this regard, the Cenagas sent the official CENAGAS-UGTP/00434/2022 to natural gas transportation users, in which it states that those who have a service contract will have the obligation to submit documentary evidence that they meet the requirements established in the Strategy, no later than August 13, 2022.
It should be noted that the National Natural Gas Control Center (bogs) is the entity responsible for the management, administration and operation, regardless of its users, of the Sistrangas infrastructure, as well as for guaranteeing its open access that is not unduly discriminatory.
“If the Strategy were followed, the conditions of competition in the natural gas and electricity markets would be seriously and irreparably affected”, declares the Coffee.
Among its arguments, it states that users (retailers and industrial users) who decide not to contract with the aforementioned State companies would be prevented from accessing Sistrangas’ capacity under equal conditions, artificially benefiting Pemex Y CFE.
Like various industry analysts, the Coffee He asserted that it is necessary to mention that the capacity of this system is limited and constitutes an essential input to compete in the natural gas market, given that this system has the most important infrastructure for both the transportation and the importation of natural gas.
Other expert consultants on the subject, such as the analyst of energy legislation, Miriam Grunstein; Eduardo Prud’homme, the former head of the Cenagas Technical Management and Planning Unit, today an energy affairs consultant at Gadex, and the first general director of Cenagas after its creation, David Madero, also recently warned The Economist that CFE Y Pemex They do not have enough gas to meet the national demand of almost 9,000 million cubic feet per day, so they will have to buy it in the United States from subsidiaries of the companies to which they are going to sell, such as Shell, BP, Trafigura and Grupo Alfa. , along with others who constitute a dozen distributors today in Mexico.
And this “would discourage the entry of potential natural gas marketers and would nullify the ability of current participants in this link to compete. This, because the Strategy prevents contracting the most efficient supplier and, instead, establishes a compulsory intermediation that substantially affects the supply conditions,” explained Cofece.
He also considered that the entry into force of this strategy, scheduled for August 13 (in which the protections that according to industrialists are being prepared pending the bogs deny access to any user, thus committing the violation of their acquired rights and the rule of free competition of the network), would generate distortions for the competitors of the CFE in the electricity production market, since users who use natural gas to produce electricity and require the transportation service would be obliged to acquire this input through the CFEwhich in turn is your competitor.
“In this way, the CFE could have incentives to increase the costs of natural gas to its competitors,” said Coffee“all of the above could result in an increase in the prices of this fuel that would be transferred to final consumers, as well as in a deterioration in supply conditions.”
Finally, he asserted that energy security could be affected due to the position assumed by both the CFEWhat Pemexinstead of diversifying supply sources.
For all this, the Coffee exhorted the Secretary of Energy, the Energy Regulatory Commission and the bogs not to implement the Supply Guarantee Strategy for the optimization of capacity in the Sistrangas and to enforce the principles of competition provided for in the current legal framework.
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