Half of Texas pipeline to be made in Turkey

February 16, 2018

HOUSTON — Borusan Mannesmann said it will supply almost half of the steel line pipe for the Gulf Coast Express Pipeline Project in Texas - and that the pipe will be made in Turkey.

[Dom Yanchunas | February 15, 2018 | AAM]

The goods will be made at the company's spiral welded line pipe mill in Gemlik, Turkey, the company said in a statement to American Metal Market on Thursday February 15. 

The 400-plus-mile pipeline will convey natural gas from the Permian Basin to the Corpus Christi, Texas, area. One of the project's joint-venture partners, Kinder Morgan, has said the pipeline will use mostly 42-inch-diameter line pipe and some 36-inch pipe. The link is scheduled to go into service in October 2019. 

Borusan, based in Turkey, confirmed that it beat other US domestic and foreign bidders for its contract to supply nearly half of the pipe. The company acknowledged that there had been complaints from domestic suppliers but said it is confident the award will be upheld. 

"Borusan’s extraordinary technical and operational performance in the prestigious pipeline projects previously executed in the US is the primary reason [for] this award," the statement said. 

"We are aware that domestic US line pipe mills filed trade actions claiming that Borusan’s line pipe sales to the United States are dumped and benefit from government subsidies," the company said. "Similar anti-dumping allegations were lodged against Borusan in 2015 with respect to oil country tubular products and were found groundless by the US Department of Commerce. We expect that these new allegations will similarly be rejected by the US authorities after investigation."

During his first week in office, President Donald Trump issued an executive memorandum calling for all new and refurbished US pipelines to use American-made steel from the melt stage through coating. The pledge was a nod to one of Trump's key constituencies during his campaign. But another base of his support was the oil-and-gas industry, and the energy sector did not want to be limited to domestic line pipe. By last summer, the Buy America plan seemed to have been dropped

American Metal Market's pricing assessment for US domestic X65 line pipe stands at $1,145-1,220 per ton, fob mill. 

Borusan's statement said the company realizes how this Texas contract may be portrayed by competitors and "we have urged the US International Trade Commission to fully investigate" and examine the bidding process to confirm it's on the up-and-up.

"We are also aware that ... some other failed bidders for the Gulf Coast Express pipeline project have cited the award of this contract to Borusan as evidence that imports from Turkey are 'injuring' US line pipe producers by undercutting domestic price levels," the statement said. "We are confident that such an (ITC) investigation will demonstrate Borusan was awarded this project based on a demonstration of its capabilities to meet the demanding technical and operational requirements of the project and not by undercutting competitor’s prices."

Borusan said all of its pipe for the Gulf Coast Express project will be shipped in 2018.

Aside from its Turkish roots, Borusan Mannesmann is also a US domestic producer. It operates an oil country tubular goods mill in Baytown, Texas. 

Gulf Coast Express LLC is a joint venture of Kinder Morgan, DCP Midstream and Targa Resources. Kinder Morgan on Sunday February 5 issued a press release stating that customer demand for the natural gas pipeline capacity was great and it was announcing open season for the last remaining capacity. That statement repeated the in-service date of October 2019.

The pipeline will run from the Waha oil field and hub in Pecos County, Texas, to Agua Dulce, Texas, just west of the port of Corpus Christi. 

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