Tenaris grows US pipe presence with Ipsco buy
Luxembourg-based steel pipe producer Tenaris has agreed to buy US-based Ipsco Tubulars from from Russian steelmaker TMK for $1.2bn.
Houston-based Ipsco produces seamless and welded oil country tubular goods (OCTG) and other pipe products across 11 facilities in the US and Canada, with a total capacity of 1mn t/yr (1.1mn st) of welded pipe, 450,000 t/yr of steel bars and 400,000 t/yr of seamless pipe.
Tenaris will acquire Ipsco's electric arc furnace-based billet and pipemaking facility in Koppel, Pennsylvania, which has a billet production capacity of 600,000 st/yr. The Koppel facility will be Tenaris' first steel bar production plant in the US.
Other facilities include a seamless pipe manufacturing plant in Ambridge, Pennsylvania, a heated and threaded pipe facility in Baytown, Texas, and a pipe manufacturing facility in Blytheville, Arkansas.
In January 2018 Ipsco had filed its first initial public offering before pulling back a month later. It refiled its IPO in March 2018, but never completed the sale of stock.
Ipsco said it had revenues of $1.08bn for the nine months ending 30 September 2018, and profit of $71.8mn, according to its most recent regulatory filings. It said 77pc of its revenue during that time was from OCTG business, with another 15pc from line pipe and the remainder from other sources.
The move comes amid multiple restarts and new investments by Tenaris and others in the US pipe sector amid a prolonged recovery in oil and gas drilling.
Tenaris announced it would open its $70mn sucker rods manufacturing facility in Conroe, Texas, in July to service the OCTG industry. Tenaris also began in late 2017 producing OCTG using imported raw billets at a new $1.8bn seamless pipe mill in Bay City, Texas.
In February, US Steel said it would restart an idled pipe mill in east Texas to service demand from the oil and gas industry.
US rig counts have recovered from the low point of 404 active rigs in May 2016 to 1,016 today, according to oil field services firm Baker Hughes. The current count is an increase of 2.1pc to the 995 active rigs a year ago but the lowest since April 2018.
Oil prices have risen since dipping at the end of 2018, with the Nymex WTI settling at $59.98/bl yesterday, up from $44.61/bl in December.
source: Argus Media
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