Tenaris S.A., Ternium S.A. and Tecpetrol International S.A. have entered into a Memorandum of Understanding (MoU) to jointly build and operate a natural gas-fired CCGT 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.
The power plant would be built in the Pesquería area of the State of Nuevo León, and would have a power capacity of between 850 and 900 MW. The project would be undertaken through a joint venture named Techgen S.A. (30% Tecpetrol, 22% Tenaris and 48% Ternium). The MoU 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 total investment required for the project is estimated in approximately US$1bn, and would be partially financed with debt. The power plant is expected to be operational in the fourth quarter of 2016.
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