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Benteler's Louisiana OCTG site to cost $975M

Keywords: Tags  Benteler Steel/Tube, oil country tubular goods, OCTG, Louisiana project, Matthias Jaeger, Bobby Jindal, Red River Waterway Commission, Port of Caddo-Bossier Caddo Parish Commission

LONDON — Benteler Steel/Tube GmbH’s oil country tubular goods (OCTG) facility in Louisiana will be capable of producing about 320,000 tons annually and cost about $975 million when both phases of the project are completed.

That is up from a prior estimate of about $900 million. "The figure of $900 million we communicated at the announcement ceremony was rather a ballpark estimation. With the project progressing, we are by now able to give a more precise figure," a Benteler Steel/Tube spokeswoman told AMM via e-mail.

The facility will create about 1,000 construction jobs, 675 permanent jobs and is expected to lead to a cumulative economic impact on northwest Louisiana of $16.2 billion over the next two decades.

"With more than 25 percent of our steel and tube products already flowing into the United States and demand expected to increase, this new Caddo Parish plant is poised to play a critical role in supporting the U.S. domestic energy industry," Benteler Steel/Tube president and chief executive officer Matthias Jaeger said in a statement.

The company officially broke ground on the project Sept. 16, although a port executive said work on the site began earlier (, Aug. 2).

The first phase of the project, a seamless hot-rolling tube mill (, Oct. 26), is expected to be completed by the end of 2014 and operational in the third quarter of 2015. The second phase, which calls for the addition of an electric-arc furnace (, Nov. 7), is due to be opened in 2020, Louisiana Gov. Bobby Jindal said in a statement on his website.

Benteler’s analysis of the U.S. OCTG market shows "strong demand through 2035 as the nation reduces energy imports and increases domestic production," he added.

Output from the facility is destined for Illinois, Indiana, Ohio and Texas, as North American seamless OCTG capacity now focuses on Alabama, Ohio, Pennsylvania and Mexico, and will be used in oil and gas exploration and transportation, power generation and mechanical applications.

Benteler Steel/Tube selected the Port of Caddo after a search that covered 13 states and more than 100 potential sites, with the facility being "one of the largest manufacturing investments in the history of northwest Louisiana," according to Jindal.

The company, a  unit of Salzburg, Austria-based Benteler International AG, has four sales offices in North America.

Benteler received incentives that included performance-based grants totaling $57.4 million to reimburse site development, infrastructure and equipment costs incurred by the port and the company over the next few years of construction and operations; a performance-based grant of $12.75 million to reimburse certain relocation and internal training expenses; and the development of a center for advanced manufacturing and engineering technology on the campus of Bossier Parish Community College, according to Jindal.

Other regional partners contributing to infrastructure improvements for the project include the Red River Waterway Commission ($6 million), the Port of Caddo-Bossier ($3 million) and the Caddo Parish Commission ($2.6 million).

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