Pipe maker Tenaris considers growing in Texas

Steel pipe maker Tenaris will consider expanding its new Bay City mill southwest of Houston and look to grow in the West Texas oil patch as the company positions itself to take advantage of steel tariffs raising prices of overseas competitors, the chairman and chief executive said.

Tenaris, an Argentinian company with roots in Italy, opened its $1.8 billion state-of-the-art pipe mill in Bay City at the end of last year. The mill, which produces piping that goes into oil and gas wells, is designed to compete with Asian imports by bringing pipe manufacturing closer to the drilling boom in the Permian Basin in West Texas.

It certainly helps that South Korea — a key competitor — already has agreed to quotas to reduce its steel piping exports to the U.S., Tenaris CEO Paolo Rocca said.

“We feel we are very well positioned, and we support this policy,” said Rocca, who visited Houston last week to tour facilities and attend the Offshore Technology Conference.

Tenaris, which has its North American headquarters in Houston, has a smaller pipe mill in Conroe, as well as facilities and service centers in Houston, Freeport and Midland. It employs about 2,000 in the Houston area, including 600 at the Bay City mill.

Rocca said the Bay City mill is up and running but won’t achieve its production capacity of 600,000 tons of steel pipe a year until late this year or next year.

After that, Tenaris will consider expanding, including near the Permian Basin.

“The Permian really is essential for us because it’s the area where we foresee the highest growth,” Rocca said. “Shale is a story that will go on for the next 10, 20, 30, 40 years.”