Mexican public utility responds to arbitration claim from US natgas supplier

Mexican public utility CFE has replied to an arbitration claim from US-based firm Whitewater Midstream and stated the company and its contracts with CFE will be the subject of unspecified legal action conducted by the utility.

“CFE will conduct legal action, both in the civil and criminal areas, in Mexico and the United States. We will seek to define and establish the responsibility of the former CFE employees who extended these contracts, as well as determining the responsibility of their accomplices in this previously non-existent company,” CFE said in a statement.

A dispute between Whitewater and the state-owned firm surfaced earlier this month after the US-based company said it had filed an arbitration claim against CFE due to unpaid natural gas supply services during the Texas freeze in February.

According to CFE, Whitewater is “under investigation, both in Mexico and the United States, for having been been granted contracts that are suspected of involving corruption, abuse of trust and influence peddling, given that it is recently created company, that had no assets, experience in the sector or financial solvency, but was nevertheless given multi-million dollar contracts with CFE.”

CFE said it holds a 20-year pipeline supply contract with Whitewater that was awarded directly and without a proper tender process. Meanwhile, CFE subsidiary CFE International (CFEi), which is responsible for natural gas imports, holds two 15-year contracts with Whitewater, CFE said, which it called “unfair” and “unfavorable”.

CFEi has attempted to renegotiate the contracts, but Whitewater has refused to enter a new agreement, the statement said.

As BNamericas reported previously, Whitewater’s confirmation that it had filed an arbitration case against CFEi came after Spanish daily El País published a years-long investigation into the relationship between the US firm and former CFEi president Guillermo Turrent. 

The article alleges that Turrent helped Whitewater’s founders, whom he had known for decades, to win a series of high-value natural gas supply contracts with CFEi.