Mexican Government Orders Pemex to Take Over Hydrogen Plant at Tula Refinery

by Warren Seah

In a strategic move toward fuel self-sufficiency, the Mexican government has directed Pemex to acquire Air Liquide’s hydrogen plant located at the Tula refinery in Hidalgo state. President Andres Manuel Lopez Obrador has emphasized the importance of securing a reliable hydrogen supply for the refinery, considering it a matter of public interest.

Energy Sovereignty on the Horizon

To accomplish the federal government’s objective of achieving energy sovereignty through self-sufficiency in refined product production, the decree emphasizes the necessity of gaining autonomy in hydrogen supply for the Tula refinery, without being dependent on external parties. Published on Tuesday, this measure marks a significant step towards Mexico’s independence in the fuel market.

Strengthening National Resources

Under the previous administration led by President Enrique Pena Nieto, Pemex had entered into a contract worth almost $53 million with French company Air Liquide to meet the hydrogen demands of the Tula refinery. However, relying on third-party suppliers for hydrogen jeopardizes the production of domestic gasoline and diesel. Moreover, Mexico’s agreement with Air Liquide was deemed economically unviable for Pemex.

Ensuring a Fair Transition

As part of this transition, Pemex will offer compensation to Air Liquide for the hydrogen plant based on an appraisal conducted by the Institute of Administration and Appraisal of National Assets. By taking this decisive step, Mexico is strengthening its position in the energy sector and forging a future of fuel self-reliance.

Mexico Orders Negotiations for Buyback of Hydrogen Plants

Mexico’s state-owned oil company, Pemex, has been instructed by President Lopez Obrador to commence negotiations to repurchase hydrogen plants that were previously sold during past administrations. Pemex CEO Octavio Romero confirmed this directive in 2021, stating that the Tula, Madero, and Cadereyta refineries were targets for repurchase.

While the sale of the Cadereyta plant has been successfully canceled by the Lopez Obrador administration, Pemex still incurs significant leasing costs for the remaining facilities. Pemex has yet to comment on this matter when approached by OPIS.

In response to these developments, Air Liquide, the company that operates hydrogen plants in Mexico, emphasized that the recent decree does not constitute an expropriation. Their legal team is currently evaluating the implications of the decree.

It is worth noting that the Mexican government has previously attempted to assert control over a privately owned railway line operated by Grupo Mexico in southern Mexico. However, an agreement was eventually reached between the government and the company.

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