Mexico’s state-run power utility on Sept. 21 filed a breach of contract lawsuit in a Texas state court against former executives of a U.S. arm, alleging they improperly awarded a lucrative gas supply deal.
The lawsuit, by a unit of Comision Federal de Electricidad (CFE), comes amid Mexican President Andres Manuel Lopez Obrador’s efforts to redraw energy deals that he believes disadvantage CFE and state oil firm Petroleos de Mexico. Mexico has disputes with U.S. companies involving some $30 billion.
Guillermo Turrent and Javier Gutierrez, two former top executives of CFE International, awarded contracts to Texas-based WhiteWater Midstream LLC for a pipeline and gas supply that saddled the company with hundreds of millions of dollars in damages, alleges a lawsuit filed in Harris County District Court in Houston.
The two misled CFE’s board by failing to disclose prior business dealings with WhiteWater executives, CFE claimed. The lawsuit seeks at least $1 million in damages.
An attorney for the two men did not reply to requests for comment.
CFE International is obligated to pay WhiteWater Midstream “enormous sums for unneeded and overpriced natural gas and unnecessary pipeline costs,” the lawsuit claimed.
CFE through one contract receives 1.5 Bcf/d of natural gas, some of which is not needed and resold “routinely causing enormous losses” to the Mexican company. A related, long-term pipeline contract was unneeded and designed to help WhiteWater obtain outside financing, the lawsuit alleged.
“While this lawsuit is not directed at WhiteWater, it is clearly part of an ongoing intimidation campaign from a Mexican state-owned enterprise in response to arbitration proceedings initiated by WhiteWater,” the Texas company said in a statement.
“CFE’s meritless claims regarding WhiteWater follow explicit threats made by CFE officials to renegotiate the terms of legitimate, market-based contracts,” it added.
Editor’s note: This story was updated at 7:49 a.m. CT on Sept. 22.
Recommended Reading
Keeping it Tight: Diversified Energy Clamps Down on Methane Emissions
2024-04-24 - Diversified Energy wants to educate on emission reduction successes while debunking junk science.
Qnergy Tackles Methane Venting Emissions
2024-03-13 - Pneumatic controllers, powered by natural gas, account for a large part of the oil and gas industry’s methane emissions. Compressed air can change that, experts say.
MethaneSAT: EDF’s Eye in the Sky Targets E&P Emissions
2024-03-07 - The Environmental Defense Fund and Harvard University recently launched MethaneSAT, a satellite tracking methane emissions. The project’s primary target: oil and gas operators.
Exclusive: Scepter CEO: Methane Emissions Detection Saves on Cost
2024-04-08 - Methane emissions detection saves on cost and "can pay for itself," Scepter CEO Phillip Father says in this Hart Energy exclusive interview.
Exclusive: Rebellion Energy Orphan Well Method Pinpoints the Particulars in Plugging
2024-03-01 - Rebellion Energy Solutions CEO Staci Taruscio dives into the company's methods when plugging for permanence in this Hart Energy LIVE Exclusive with Editorial Director Jordan Blum.