Mexico's state energy company, Pemex, has been directed by President Andres Manuel Lopez Obrador to assume immediate temporary control of a privately-operated hydrogen plant within one of its major refineries. The decree, signed by the President, deemed the hydrogen supply from the plant, operated by France's Air Liquide, as “a matter of public interest.”
President Lopez Obrador, known for tightening state control over the energy market since taking office in December 2018, cited the Mexican Constitution in the decree, asserting that the refining arm of Pemex, TRI, should promptly occupy the hydrogen plant.
Mexico relies on third-party sources for hydrogen, and the government expressed concern that this reliance was jeopardizing gasoline and diesel production. The decree also stated that the agreement with Air Liquide was economically unviable for Pemex.
While the duration of the temporary occupation was not specified, nor was the compensation arrangement with Air Liquide, both companies have not yet responded to requests for comment.
Energy lawyer Julia Gonzalez noted that declaring an asset “a matter of public interest” was a step short of expropriation, although it could not lead to expropriation. She pointed to previous instances, such as the government's takeover of part of Grupo Mexico's railway earlier this year.
Under former President Enrique Pena Nieto, TRI had entered into an agreement with Air Liquide in 2017 to supply hydrogen for refinery operations over 20 years, aimed at reducing costs for the state-owned Pemex. Air Liquide was responsible for operating the existing plant within the refinery and investing in a second plant to fulfill hydrogen requirements for expansion projects.
President Lopez Obrador, known for his resource nationalist stance, has frequently clashed with large businesses, particularly in the energy sector. His policies have led to trade disputes with the United States and Canada, with accusations of favoritism toward corporate elites in the energy market.