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(Adds details of dispute, Urzua quotes)
MEXICO CITY, June 29 (Reuters) - Canada expressed its concern about a gas pipeline dispute that has raised diplomatic tensions with Mexico during the Group of 20 nations summit in Japan, but the matter could be resolved soon, Mexican Finance Minister Carlos Urzua said on Saturday.
Mexican state power utility CFE said this week it would negotiate a fairer resolution to contractual disputes over several pipelines being built by companies including Mexico's IEnova and Canadas TC Energy Corp .
Urzua said he met with Canada's Finance Minister Bill Morneau during the summit and was "optimistic" there would be an agreement soon.
"He expressed his concern about this matter of TransCanada," Urzua said, using a previous name for TC Energy Corp.
IEnova, a unit of U.S.-based Sempra Energy, says the CFE is seeking arbitration over a contract it signed in partnership with TC Energy to build a $2.5 billion pipeline from Texas to the Mexican Gulf coast port of Tuxpan.
"We hope this problem is resolved very soon ... That it doesn't even reach the level of international arbitration, and that simply an agreement is reached between the sides. We are very optimistic about that," Urzua said.
The row has revived concerns that Mexican President Andres Manuel Lopez Obrador's government could put in jeopardy contracts signed under previous administrations, the last six of which the leftist president has characterized as part of a corrupt "neo-liberal" era.
He has been highly critical of the government of his predecessor Enrique Pena Nieto, who sought to lift economic growth by opening up the energy sector to private capital, an approach that Lopez Obrador has so far roundly rejected. (Reporting by Dave Graham Editing by Paul Simao)