Despite the fact that it has been awarded similar contracts, GasNatural Mexico charged last week that Mexico’s anti-trustcommission will not allow it to participate in an auction for amulti-million dollar natural gas distribution contract. Thecontract, scheduled to be awarded on June 21 by the ComisionReguladora de Energia (CRE), calls for a $100 million investment inthe heavily populated Guadalajara metropolitan area. Nearly 4million live there, and the Guadalajara contract will be one of thelargest issued by the government for natural gas distribution.

Mexico’s anti-trust commission, known as the CFC, did notcomment, but Gas Natural Mexico, a unit of Spain’s Repsol, saidthat it had been informed of CFC’s objection to its contract bid ina letter. Along with Gas Natural Mexico, Tractebel of Belgium andGaz de France had each submitted bids in April for the contract. Anappeals process is permitted by Mexican law, but Gas Natural saidit would not ask for a reconsideration.

Even though Gas Natural Mexico may lose out on the Guadalajaracontract, it still will hold the strongest presence in the naturalgas distribution market in Mexico. Through its Gas Natural Mexicocompany, Repsol holds permits for natural gas distribution forseveral geographic zones, including: Toluca, 47,279 users, with aninvestment of $31.6 million; Monterrey, 557,052 users, with aninvestment of $220 million; and El Bajio, 72,384 users, with aninvestment of $27 million. Five other geographic zones in Mexicoalso are serviced by a Repsol company, for a total of eight of 18permits issued by the government thus far.

The CRE has defined 21 geographic zones for Mexico’s natural gasdistribution purposes and issued 18 permits, representing nearly$835 million in investment commitments with coverage for 77municipalities.

Mexico’s Deputy Energy Secretary Mauricio Toussaint said thatweek that the government, which runs the country’s energyindustries, has accelerated awarding new licenses to outside powerprojects to meet the country’s growing energy needs. Mexico’selectricity industry was nationalized in 1960, but in recent years,it has used energy supply contracts with private companies undercogeneration or independent power producer plans. Toussaint saidMexico has speeded up construction of new power generation plantsbecause energy needs are growing at a rate of nearly 8% a year.

“Our margin of energy reserves is at one of its lowest levels inthe past few years,” Toussaint said. “We have to speed the processup.”

Toussaint said that the Mexican Energy Ministry has called uponthe electricity industry to use private investment. “If we do notfind the sufficient investment flows to generate more electricity,the growth of the country will be limited.”

Carolyn Davis, Houston

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