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Borusan Mannesmann eyes Texas site for mill

Keywords: Tags  Borusan Mannesmann, Ari Kagan, Chambers County, Cedar Crossing Industrial Park, Goose Creek Consolidated Independent School District, shale, OCTG, line pipe Michael Cowden

PITTSBURGH — Borusan Mannesmann is considering an industrial park in Texas for its new 300,000-ton-per-year energy tubulars mill, according to the company and documents filed with state and local officials.

The same documents also reveal new details about the $150-million project, including that it might include a spiral mill and coating facility.

Borusan Mannesmann previously said it was mulling sites in Oklahoma and Texas for its new oil country tubular goods (OCTG) and line pipe mill (, Jan. 2). The company will purchase raw materials for the plant from both domestic and international sources, a company spokesman said.

The Istanbul, Turkey-based steelmaker said it is eyeing a $10.9-million site in the Cedar Crossing Industrial Park in Chambers County next to Baytown and about 35 minutes from Houston, according to documents filed with the Goose Creek Consolidated Independent School District.

"The plant at the Cedar Crossing Industrial Park in Texas is one of the candidate locations for the plant. There are a few other potential locations for the facility," the company spokesman said in an e-mail to AMM, declining to disclose those locations. Logistics advantages, negotiations with property owners and incentive programs are all factors in the site selection process, he said.

Cedar Crossing is one of the largest industrial parks in the world, with freeway, rail and port access, including to the Houston Ship Channel, according to its website.

Borusan Mannesmann is seeking a value limitation on the property because incentives offered by local governments will be a key factor in its site decision, according to the documents filed with the school district. The Commissioners’ Court of Chambers County has approved a tax abatement or equivalent funding for Borusan Mannesmann Pipe U.S. Inc., according to the minutes of a Nov. 13 meeting.

Borusan Mannesmann plans to spend $148 million on the facility, including nearly $11 million for land, $37 million on buildings and property improvements and $100 million on machinery, according to the school district filing. But as much as $290 million could be spent over the next 10 years, with half related to construction and equipment purchases over the next two to three years, according to the documents signed by Borusan Mannesmann Pipe U.S. chief financial officer Ari Kagan.

Construction on the facility is expected to begin in February and be completed by October, the documents said. Hiring would begin in August, with the facility expected to be fully operational by February 2014.

The project is expected to include corporate offices and a production facility, as well as heat-treat, hydro-testing and threading buildings, the documents said. Future expansions are all possible, potentially including a spiral mill and a coating facility, according to a schematic of the facility.

Borusan Mannesmann already said it plans to make high-quality energy tubulars to serve increasing requirements from the U.S. shale drilling industry. But the company appears perhaps even more bullish on the outlook for the U.S. energy tubulars market in the recently filed documents.

Rising shale oil and gas production "will result in the U.S. soon becoming a self-sufficient country for its energy requirements," Borusan Mannesmann said, boosting demand for OCTG. "Currently, U.S. production of oil country tubular goods is not enough to cover demand, and thus a considerable amount of these products are imported."

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