Tenaris, Ternium and Tecpetrol to Build and Operate Power Plant in Mexico
LUXEMBOURG -- (Marketwired) -- 08/19/13 -- Tenaris S.A. (NYSE: TS)
(BAE: TS) (BMV: TS) (MILAN: TEN), Ternium S.A. (NYSE: TX) and
Tecpetrol International S.A. announced today that they have entered
into a memorandum of understanding to jointly build and operate a
natural gas-fired combined cycle electric power plant in Mexico,
which would supply Tenaris's and Ternium's respective Mexican
industrial facilities. Together, both companies are one of the
largest private energy consumers in Mexico. Tecpetrol is a
wholly-owned subsidiary of San Faustin S.A., the controlling
shareholder of both Tenaris and Ternium.
The power plant would be built in the Pesqueria area of the State of
Nuevo Leon, and would have a power capacity of between 850 and 900
megawatts. The project would be undertaken through a joint venture
vehicle named Techgen, S.A. de C.V., which would be owned 30% by
Tecpetrol, 22% by Tenaris and 48% by Ternium.
The memorandum of understanding contemplates, among other things,
that Techgen would enter into power supply and transportation
agreements pursuant to which Tenaris and Ternium would contract 22%
and 78%, respectively, of Tecghen's power capacity.
The commencement of the project would be subject to execution of
definitive documentation and other customary conditions, including
receipt of regulatory approvals by Mexico's Comision Reguladora de
Energia and Secretaria de Medio Ambiente y Recursos Naturales
(Mexico's energy and environmental regulatory authorities,
respectively) and specific agreements with Mexico's Comision Federal
de Electricidad (Mexico's Federal Electricity Commission).
The total investment required for the project is estimated in
approximately US$1 billion, and would be partially financed with
debt. The combined cycle electric power plant is expected to be
operational in the fourth quarter of 2016.
Paolo Rocca, Tenaris's CEO and Chairman and Ternium's Chairman,
commented, "This project contributes to the long term competitive
position of our industrial activities and strengthens Mexico's
electricity system. The recently announced Energy Reform would
enhance the benefits of this significant investment."
Tecpetrol is a company operating in the energy sector. With over
7,500 employees, Tecpetrol's activities are organized in two main
business units: oil and gas exploration and production (E&P), and gas
and power transportation and distribution (G&P). The company's E&P
division operates in Argentina, Bolivia, Colombia, Ecuador, Mexico,
Peru, Venezuela and the United States, and its G&P division operates
gas and liquid transmission systems in Argentina, Peru and Mexico.
Tecpetrol generates energy for its own production and consumption.
Ternium is a leading steel producer in Latin America, with an annual
production capacity of approximately 10.8 million tons of finished
steel products. The company manufactures and processes a broad range
of value-added steel products for customers active in the
construction, automotive, home appliances, capital goods, container,
food and energy industries. With production facilities located in
Mexico, Argentina, Colombia, the southern United States and
Guatemala, Ternium serves markets in the Americas through its
integrated manufacturing system and extensive distribution network.
In addition, Ternium participates in the control group of Usiminas, a
Brazilian steel company. More information about Ternium is available
Tenaris is a leading global supplier of steel tubes and related
services for the world's energy industry and certain other industrial
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