Mexico strikes deal with gas companies in pipeline row

MEXICO CITY, Aug 28 (AFP): Mexico's president said Tuesday his government has reached a deal with gas pipeline operators to settle a dispute over contracts signed under his predecessor, defusing a row that had spooked investors.

President Andres Manuel Lopez Obrador said the deal, reached with four companies based in the US, Canada and Mexico, would save the government $4.5 billion.

The leftist leader had rattled markets last month when his administration took the companies to court over their contracts to deliver gas to the public utilities company CFE.

The contracts were signed under former president Enrique Pena Nieto, but the current administration called them "exorbitant."

The government did not immediately release full details on the renegotiated contracts.

However, Lopez Obrador said the companies had agreed to take a profit cut of more than 30 per cent.

"We owe our thanks to the goodwill of these business executives, who were willing to hold talks to reach an agreement and put the national interest first," Lopez Obrador told a press conference.