From the Houston Chronicle
Bay City mill’s products are meant to compete with imports from Asia
Tenaris expects its new 1.2-million-square-foot mill in Bay City to produce 600,000 tons of steel pipe a year. The heavily automated plant has about 600 workers.
Global steel pipe giant Tenaris has commenced full operations at its new $1.8 billion mill southwest of Houston, churning out piping for shale oil and gas wells in Texas, Oklahoma and beyond.
The state-of-the-art mill in Bay City is designed to compete with Asian imports by bringing pipe manufacturing closer to oil and gas wells. Tenaris, an Argentinian company with roots in Italy, opted to build its most modern and highly automated mill in Texas to serve the shale drilling boom in West Texas’ Permian Basin and other regions.
U.S. shale and other onshore fields represent 35 percent of the global demand for such piping, Tenaris officials said. The resurgence of drilling in the United States is the biggest reason global pipe demand for onshore wells was expected to grow nearly 40 percent this year.
“Tenaris is the architect of a new business model in the steel pipe sector,” said Germán Curá, Tenaris’ president for North America. “The heart of this transformation is in Bay City, with the most advanced pipe manufacturing facility in the world.”
Tenaris was virtually unheard of in Texas until a decade ago, when it bought St. Louis-based Maverick Tube Corp. and Houston-based Hydril Co. for a combined $5 billion. In short order, Tenaris grew from about 50 Houston employees to more than 2,000.
Tenaris touts its “Rig Direct” system, a just-on-time model that supplies pipe to match the exact needs of its customers just when the products are required in the field, lowering storage, maintenance and inspection costs. Despite the heavy use of robotics to move the steel from station to station to manufacture the finished piping, the mill employs about 600 workers.
The 1.2-million-square-foot mill will produce 600,000 tons of steel pipe a year. The specialized piping includes drill pipe used for drilling and creating wells; casing pipe that’s cemented into place to line the walls of the well and give it structural stability; and tubing pipe inserted into the well through which the oil and gas travels.
Pressed ahead with construction during bust
Tenaris began building the mill near Houston when oil prices were booming and then opted to press ahead during the bust. Tenaris had hoped to open the mill early this year as the oil recovery picked up speed. Drilling has slowed in recent weeks, but the delayed November opening still coincides with a resurgence in onshore oil and gas activity in Texas and Oklahoma, which have led the U.S. rebound.
The rig count in Texas has climbed more than 60 percent over the past year, climbing to nearly 450 from 276, according to Baker Hughes. In Oklahoma, the rig count has climbed more than 50 percent for a year ago, to 122 from 79.
Domestic piping manufacturers are hoping the U.S. government increases duties on Asian steel imports, arguing that some Asian countries are unfairly dumping their steel in the U.S. at uneconomically low prices just to gain market share. In the early years of the shale boom, the Commerce Department slapped high tariffs on Chinese manufacturers, which were accused of dumping steel and pipe.
From Tenaris
Tenaris Tests Entire Hot Rolling Process at Bay City Seamless Mill
Tenaris has produced its first seamless pipe at its Bay City, Texas, mill after having tested the complete hot rolling process.
The solid steel billet underwent the transformation from bar to pipe starting at the rotary furnance, passing through the piercer, and after going through other stages of production, the pipe made its way to the cooling bed.
“This first pipe sets our ramp up of production in motion,” said Germán Curá, President North America. “This is a major achievement and a reflection of the dedication by our entire team whom have contributed hard work in all aspects of the process.”
The production of the first pipe marks the last major milestone in the construction of the new seamless facility – Tenaris’s first greenfield project in 60 years.
Two areas of the plant – heat treatment and finishing – are already in operation, processing and threading pipes. Tenaris has also been dispatching pipe to customers from the mill’s onsite service center.
Tenaris’s mill in Bay City serves as the hub of the company’s industrial activity in the U.S., driving its mill-to-rig business model known as Rig Direct™, which synchronizes the production of pipe with customers’ drilling operations through the direct delivery of pipes, and services.
Final tests of the hot rolling mill will continue to ensure all critical processes and systems are executed properly in preparation for the start of operations.
The $1.8 billion seamless plant is the most advanced, automated pipe manufacturing facility in the world, with a capacity to produce 600,000 tons of OCTG when fully operational.
