Tenaris, Ternium and Tecpetrol to Build Power Plant in Mexico

Tenaris S.A.

, Ternium S.A.

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