Nucor Corp. has ended a four-year old deal with Encana Corp. to jointly develop natural gas wells in Piceance Basin in western Colorado, opting to purchase 49 percent of Encana’s natural gas rights in the region.

Nucor, a steel producer based in Charlotte, North Carolina, says restructuring of its gas-hedging operation will ensure its access to long-term supplies of natural gas, which it needs to produce direct reduced iron in its plants and to run its steel mills.

Nucor makes the reduced iron to be a low-cost substitute for scrap it uses to produce steel in its mills.

“These transactions give both companies capital flexibility,” says Nucor CEO John Ferriola. “In addition, they preserve Nucor’s long-term access to low cost gas resources in support of Nucor’s raw material strategy.”

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