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CFE files breach of contract suit in Texas court

Mexico City, Mexico — Mexico’s state owned Federal Electricity Commission has filed a breach of contract lawsuit in a Texas court. The suit was filed September 21 against former executives of a U.S. subsidiary. The suit alleges that they improperly awarded a lucrative gas supply contract that in turn, cost the company millions.

The lawsuit, filed by a unit of the Federal Electricity Commission (CFE), comes amid efforts by Mexican President Andrés Manuel López Obrador to reconsider agreements in the energy sector that he says hurts Pemex.

According to the lawsuit filed in Harris County District Court in Houston on September 21, Guillermo Turrent and Javier Gutiérrez, two senior CFE International executives, allegedly awarded contracts to Texas-based WhiteWater Midstream LLC for gas pipeline and gas supply.

CFE International’s contracts required the company to pay WhiteWater Midstream “huge sums for unnecessary and overpriced natural gas and unnecessary pipeline costs,” according to the suit.

The CFE lawsuit seeks compensation for at least $1 million USD for being misled by the board of directors by not disclosing prior business relationships with WhiteWater executives.