The Boards of Directors of CFE Internacional (CFEi) and CFEnergía met on Thursday, February 9 by videoconference. Manuel Bartlett Díaz, general director of the CFE, led the sessions in his capacity as president of the Council.
During the CFEi Council session, Miguel Reyes Hernández presented the new National Sovereignty and Security Model, whose objective is to ensure the supply of natural gas to the country, at competitive prices, for the CFE’s electricity generation.
Among the results achieved as of February 2023, he highlighted that CFEi uses 40% of contracted natural gas transportation, compared to the previous administration, which only used 26%.
Despite the fact that 75% of the natural gas supply is linked to disadvantageous and leonine contracts from the past administration, CFEi has acquired through its trading, a natural gas molecule at better prices, while at the same time it has obtained by selling natural gas in different regions of the USA extraordinary profits.
CFE International is conducting an investigation, both in Mexico and the United States, into various leonine and disadvantageous contracts that have had a negative impact on operational flexibility to transport gas between regions of the US and to Mexico, as well as on the gross profitability of CFEi.
In this sense, the previous administration sought to anchor the creation, development, and operation of a company that would acquire, market, and manage transportation assets on behalf of CFE, through contracts without bidding and with possible corruption and influence peddling, which resulted in excessive volumes of natural gas with intermediary companies without experience or reputation in the industry, in addition to contracting excessive transportation capacity in the United States, in regions of little use to meet the needs of natural gas supply to Mexico.
Regarding the 2022-2024 Business Plan, Miguel Reyes explained that, during the present administration, the supply of natural gas for electricity generation has been prioritized, because it turns out to be one of the least polluting, most economical and efficient fuels. CFE Internacional outlined its strategic objectives:
- Contribute to guarantee the sovereignty and energy security of Mexico.
- Contribute to the generation of economic value and profitability for the CFE.
- Increase efficiency in the operation of the subsidiary company.
- Institutional and commercial regulatory compliance, prevention of corporate criminal liability and acts of corruption.
The CFEi Council took cognizance of the 2022 Financial Statements and approved the 2021 Audited Financial Statements, the 2023 Marketing Plan and the update of the Organizational Structure.
Regarding CFEnergía, the general director of the subsidiary highlighted the actions undertaken in terms of renegotiation of molecule contracts, transportation and contracts to third parties, which have translated into savings and income that benefit the finances of CFE and the subsidiary company .
He spoke about the actions that CFEnergía undertakes in the supply of fuels for the Yucatan Peninsula, Baja California Sur, the West and the Center of the country:
With the construction of the Cuxtal gas pipeline in 2020, the CFE increased the availability of natural gas to 5 plants in the Yucatan Peninsula by 40%, with savings from 2020 to date of 15 thousand 301 million pesos, derived from the substitution of fuel oil and diesel for natural gas.
Derived from the Natural Gas Supply Contract with New Fortress to supply the mobile generation units installed in La Paz, BCS, a competitive price was achieved, in addition to introducing natural gas for the first time in this area and significantly reducing the cost of generation . The total savings for 2021-2022 was 1,962 million pesos.
In the case of the supply of natural gas to the West and Center of the country, the “Wahalajara” system was completed in October 2020 with the entry into operation of the Villa de Reyes – Aguascalientes – Guadalajara gas pipeline, generating savings of 2 thousand 878 million dollars from 2021 to date.
CFEnergía has maintained positive results that provide security to CFE’s finances. From January to December 2022, 17 thousand 903 million pesos of gross profit were obtained, which represented an increase of 5% compared to 2021. CFEnergía has redirected its profits from going to current expenses in the previous administration, to investment to strengthen the CFE . To date, more than 34 billion pesos have been invested in strategic projects of the present administration
Miguel Reyes ended his presentation by informing that the definitive solutions to the natural gas transportation surpluses contracted in the previous administration in the US and in Mexico will be based on the supply of natural gas, in the following order of priority:
- CFE electricity generation (current power plants and new projects).
- Supply to fertilizer plants.
- Natural gas liquefaction and export plants.
- Supply to the private sector.
Manuel Bartlett, general director of the CFE, made a call to continue strengthening both subsidiaries and to solve the problem of natural gas surpluses left by the previous administration.
The videoconference had the additional participation of: Humberto Morales Moreno, independent director; David Fernández Dávalos, independent director; Alejandro Castillo Morales, SENER director; Edmundo Sánchez Aguilar, counselor of the Federal Government; César Alejandro Hernández Mendoza, counselor of the Federal Government; Raúl Jiménez Vázquez, Secretary of the Council and Gilberto Osio Sánchez, Deputy Secretary of the Council.
The CFEnergía board meeting had the additional participation of David Rangel Zermeño, SENER director, and José Antonio Bretón Betanzos, deputy secretary of the Board.
