The Energy Regulatory Comission (CRE) declares the expiration of 156 permits for distribution, transport and sale of Liquefied Petroleum Gas
María Fernanda Solís Álvarez
Declaration of Expiry. On April 6th, 2020, the Energy Regulatory Commission (“CRE”) published in the Federal Official Gazette the AGREEMENT declaring the expiration of 156 (one hundred and fifty six) distribution permits through distribution plants, transportation by different means of transport other than pipelines, retailing and sale to the public of Liquefied Petroleum Gas (LPG).
Expiration of Permits. In accordance with the provisions of articles 54, section III and 55 section I, sections a) and b) of the Hydrocarbons Law (the “Law”), the CRE may terminate the corresponding permits for expiration causes as provided in the following cases:
(a) If the permit holder does not exercise the rights inherent to his permit within the term established therein; or
(b) In case the corresponding permit does not foresee a term and the permit holder does not exercise the rights contained in the corresponding permit for a consecutive period of 1 (one) year.
In both cases, it will be necessary that the permit holders have ceased to exercise their rights and comply with their obligations under said permits. The omissions by the permit holders are summarized in the following:
(i) Failure to conduct and/or execute the construction works of the facilities established in the permit;
(ii) Failure to meet the dates set forth in the permit in order to start commercial operations;
(iii) The omission regarding the establishment of reserve power stations in accordance with the permit;
(iv) The suspension in the operation and/or execution of the activities established in the permit;
(v) The total or partial dismantling of the facilities associated with the permit without having given the corresponding notice to the CRE, in terms of the Law; and/or
(vi) Failure to comply with the periodic obligations for the corresponding consecutive fiscal years (e.g. payment of rights).
Transcendental Obligations. Notwithstanding the foregoing, in terms of the Law, the expiration of the corresponding permit under no circumstances shall exempt its holders from the responsibilities inherent to it with any third party and/or public entities. Therefore, the permit holders will continue to be obligated by the permits even when the expiration of their permit has been declared.
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Should you require additional information on these issues, or specific advice regarding a specific case, please do not hesitate to contact any of the members of our Infrastructure & Energy practice team.
Lupita Esparza Sánchez lesparza@rrs.com.mx
María Fernanda Solís Álvarez msolis@rrs.com.mx
