MEXICO Trends and Developments Contributed by: Carlos de Maria y Campos, Francisco Fernández Cueto, Antonio Borja and Eduardo García Travesi, Galicia Abogados
Midstream Strategic projects
To protect the fuels markets, the new LSH and its regulations include robust compliance, reporting, and oversight obligations for permit holders. These measures aim to enhance market security, deter illegal activities, and protect legitimate participants. Power Power sector overview Within the new constitutional and regulatory frame- work, the power industry is poised to become the epicentre of Mexico’s infrastructure transformation. The Ley del Sector Eléctrico (LSE), in effect since March 2025, and its implementing regulations, issued in October 2025, establish a state-led planning and operational model, while preserving clearly defined spaces for private sector participation. The LSE reaffirms core principles, which all projects must observe to obtain permits and grid access: • efficiency; • quality; • continuity; • accessibility; • security; State prevalence and mandatory/binding planning The new legal framework for the electricity sector is built around a central principle: the state has prior- ity over private participants in power generation and commercialisation. This is what the LSE defines as “prevalence of the State” ( prevalencia ). In practical terms, this means the government determines how the system grows, and private participation fits within that strategy. How prevalence is ensured This priority is exercised through the state’s “plan- ning” authority, which sets the strategic direction of the national electric system and determines which projects are integrated. • reliability; and • sustainability. The state’s prevalence is measured as a percentage (no less than 54%) of the electricity injected annually into the grid, which must come from:
To maintain control over the national pipeline system, the government will classify as “strategic” those pro- jects with greater transportation capacity or serving broader geographic areas of the country. Pipelines longer than 100 km or with a wider diameter will fall into this category. Private investors will be invited to participate in the construction and operation of infrastructure and to provide transportation services through public bidding processes led by the operator of the national pipeline system ( Centro Nacional de Control de Gas Natural , CENAGAS), either individually or jointly with PEMEX and/or CFE. Other “non-strategic” projects will be open for pri- vate developers under federal permits. In all cases, permits will be granted by the new National Energy Commission (CNE), which replaced the former Regu- latory Energy Commission (CRE). Authorisations will be issued in accordance with the binding planning of Mexico’s fuel storage levels remain alarmingly low – averaging only six days of supply, or even less in some cases, compared to the 90-day average among the Organisation for Economic Co-operation and Devel- opment (OECD) countries. This situation places the country’s fuel supply chain in a critical position. SENER. Storage The urgent need to increase and expand storage capacity nationwide is expected to drive significant investment in this segment. As with gas transportation projects, storage permits will also be subject to the state planning, ensuring the co-ordinated and efficient development of national capacity. Downstream Commercialisation of liquid fuels has been severely affected by illegal trade, which has spread across the country and fuelled corruption networks. In response, the federal government has deployed a frontal battle against this harmful activity, resulting in arrests and the closure of illegal facilities.
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