Mexico’s state-owned power utility plans to start selling natural gas to the private sector for the first time as it builds new pipelines, the company’s top executive said.
Industrial consumers would be the target market for the sales, Enrique Ochoa, chief executive officer of the Federal Electricity Commission, or CFE, told Reuters late on Monday.
Before energy reform legislation passed in December, only state-run oil company Pemex was allowed by law to produce and market natural gas.
“For us, this is a new opportunity that the reform allows,” Ochoa said.
The legislation also ended the decades-long monopoly on power generation held by the CFE, while calling for private contracts to improve transmission and distribution infrastructure.
The reform is expected to spur investment across the sector, especially in natural gas production, which is increasingly the country’s low-cost option for power. Congress could approve the rules as soon as June.
The government has said the reform will lower electricity rates, particularly for industrial users, but Ochoa declined to say how quickly that could occur.
The CFE’s near-term priority, Ochoa said, is a major expansion of the country’s natural gas pipelines. This should boost capacity to allow for more cheap imports from the United States, where output is booming.
Ochoa said five new pipeline projects due to be put out to contract later this year are designed to provide better interconnectivity.
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