NEW YORK Texas is a good
fit for Tenaris SA new seamless mill, given the active shale
plays in the area, market sources said, expressing little
surprise at the move.
"Theyre trying to base
themselves at the logistical point where they can service the
Eagle Ford and the Haynesville if it starts to get more active
again," one southern distributor said.
"I think its probably a
natural location, and they probably will be successful with
it," a second southern distributor agreed.
The Bay City mill, which will
cost between $1.3 billion and $1.5 billion, will make 600,000
tonnes of seamless oil country tubular goods (OCTG) annually
amm.com, Feb. 15).
The Luxembourg-based company
might have chosen Texas over Louisiana, the other location
previously under consideration, in part because of the
states simpler bureaucratic structure, sources said.
"Ill take Texas every
time. From a bureaucratic point of view, Louisiana is not a
very friendly state to build a factory," the first distributor
With several OCTG mills already
operational in Texas and others being builtfor example,
TPCO America Corp.s 500,000-tonne-per-year seamless pipe
facility in nearby Corpus Christisources said the state
is becoming a virtual mall for pipe buyers.
"Its like building a
shopping center now. You get one anchor shop in, and
youve got others following," the first distributor
Istanbul-based Borusan Mannesman
is also considering Texas as one of two possible locations for
its new welded OCTG mill (
amm.com, Jan. 4).
However, sources still expressed
some concern about the amount of capacity now set to come
online in both welded and seamless OCTG.
"Theres a lot of new
capacity, plus the imports coming in. They (Tenaris) obviously
feel very optimistic about the U.S. market," the second