Steelmaker ArcelorMittal inks Mexico natgas supply deal worth $2.7 billion

MEXICO CITY (Reuters) – ArcelorMittal has renewed a contract with Mexico’s state power utility CFE to be supplied with natural gas for 10 years, in a deal worth $2.7 billion, the steelmaker said.

ArcelorMittal, which called itself the largest natural gas consumer in Mexico, said in a statement that the contract would feed ArcelorMittal’s operations at Lazaro Cardenas in the state of Michoacan with gas from Waha, Texas.

The world’s second-largest steelmaker makes steel rods, slabs, bar stock and wire at Lazaro Cardenas, where it also has a port concession to import and export goods.

ArcelorMittal shipped 2.5 million metric tons of steel out of its North America segment in the third quarter.

Last month, the CEO of its competitor Ternium said Mexico needed to drastically ramp up its energy investments to combat bottlenecks affecting private industry.

In Mexico, state-run energy firms have dominated the energy market since President Andres Manuel Lopez Obrador, a resource nationalist, rolled back previous measures which had opened up the sector to private capital.

(Reporting by Kylie Madry)