The Mexican unit of Luxembourg-based steelmaker ArcelorMittal announced the renewal of the 10-year natural gas supply contract worth $2.7 billion with the Mexican state company Compañía Federal de Electricidad (CFE).
The renewal of the supply contract is “an essential step to maintain efficiency and quality in the company's production processes,” ArcelorMittal México reported in a press release.
The steel company that called itself the main consumer of natural gas in Mexico, failed to specify the terms of pricing of the gas molecule. The new 10-year contract begins on March 1, 2024.
The company reported that the supply of natural gas comes from Waha, an area located in the Texas part of the Permian Basin in Southern Texas to the western city of Lázaro Cárdenas, in the Mexican state of Michoacán.
ArcelorMittal in Mexico is the largest steel company in the country, in 2022 it registered a production of 4.0 million metric tons (mt) of crude steel and a production of 4.5 million mt of iron ore that it extracts from its mining complexes in Sonora, Sinaloa and Lazaro Cardenas.