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Tenaris aims to complete Texas mill in 2016

Keywords: Tags  Tenaris, Bay City mill, Germán Curá, OCTG, seamless, pipe mill, Thorsten Schier

NEW YORK — Tenaris SA aims to complete its new seamless oil country tubular goods (OCTG) mill in Bay City, Texas, by mid-2016, a top executive said.

"We have already filed the permit applications with TCEQ (the Texas Commission on Environmental Quality). We understand that the process will take not less than six months to about nine, and we’re ready to start construction immediately after the proper authorizations are in place," Tenaris’ North American president Germán Curá told attendees at a recent town hall meeting in Bay City, according to a recording.

The plant, targeting OCTG capacity of 600,000 tonnes a year, will have heat-treatment and premium threading facilities but no hot end.

"This plant would not produce steel. The steel bars from which we would produce the pipes would come from a facility we have in Mexico," Curá said, adding that Tenaris will build a rail terminal in the nearby coastal town of Freeport, Texas, to ship the raw materials to the plant.

A company spokeswoman didn’t respond to requests for additional comment.

Tenaris’ investment in the United States was partly due to the shale gas boom, Curá said.

"It is driven by the new natural gas deposits that we have found," he said, adding that they are once again making the United States an attractive manufacturing base. "We’re a company that has an existing presence in China and one that has decided to invest in the States. We don’t believe that we need to go to China to produce our products."

The cost of the plant has now been set at the top of a previously announced range of $1.3 billion and $1.5 billion (, Feb. 15).

The lower figure hadn’t "accounted for the infrastructure that we intend to build, the centers, the service buildings and what not," Curá said, adding that Tenaris’ first U.S. seamless operation will be very similar in design to its seamless mill in Veracruz, Mexico.

The facility will be built on a 1,500-acre site, attesting to the Luxembourg-based tube and pipe maker’s long-term commitment to the area, he said.

"We build; we don’t sell. This is an operating company, not an investment house," Curá said, noting that the new mill will be equipped with the latest in environmentally friendly technology.

"The design of the plant is accounting for technology that would surpass the thresholds established by both the (U.S. Environmental Protection Agency) and the ... TCEQ," he said.

Bay City offered a "nice incentive package" to the company to attract the mill, though it was "much, much less than our competitors," Matagorda County Judge Nate McDonald said during the meeting. "Tenaris is not looking for an incentive bonanza but they’re looking for a logistic and societal fit, and Matagorda County represents that for them."

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