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UPDATE 1-Veolia in 1 bln euro services deal with PSA

(Adds details from statement)

PARIS, Jan 20 (Reuters) - French utility company Veolia Environnement said on Tuesday it had signed a one billion euro deal to provide environmental services to three of French carmaker PSA Peugeot Citroen's factories.

Veolia said in a statement the deal, its largest ever with another industrial group, would clinch it about one billion euros in sales over 10 years. The contract will be carried out by a unit jointly owned by both firms.

Under the deal, Veolia will provide a wide range of environmental services to PSA's Sochaux, Mulhouse and Vesoul factories in eastern France.

In 2002, industrial services represented about one third of Veolia's sales. Among the other companies it works with are PSA's domestic rival Renault , French oil giant Total and European steel group Arcelor .