Saudi Steel Pipes Company, is hoping to land a five year contract renewal with Saudi Aramco this year, according to a spokesman speaking at the recent SAOGE 2010 conference and exhibition in Dammam Saudi Arabia.
“Our existing long-term contract with Saudi Aramco, which covers the provision of half a million metric tonnes of line pipe across a five year period is almost up, and we are hoping to lock the renewal deal in by the end of 2010,” said Mohammed Al-Shaheen, head of sales development.
As a premium manufacturer of carbon steel pipes, the oil and gas industry makes up a major portion of Saudi Steel Pipes’ market.
“Of course this sector is very important to us, it makes up almost 60% of our business. The rest is made up with agricultural and civil construction projects,” said Al Shaheen.
He added that despite feeling the effects of the recession, many new opportunities are opening up in Saudi Arabia and in the wider GCC.
“The recession has affected everyone. But the Saudi Arabian government has announced some huge projects in the Kingdom which will be undertaken in the next three years. I feel that business, and the market for steel pipes in general, is growing right now,” he said.
Al Shaheen cited opportunities in Abu Dhabi where some major upstream and process project work is on the table, and North Africa, he said, was also looking up, particularly in gas transmission network opportunities coming out of Egypt.
“I think it is too early to predict what 2011 will hold for the oil and gas business, but in construction the region is certainly looking stronger,” he said. Al Shaheen added that the company’s third appearance at SAOGE was an opportunity to connect with the market.
“We see that the exhibition is growing and we hope that within a couple of years it will be one of the biggest events of its kind in the Middle East. It is a good opportunity to contact our customers and tap into what’s new in the market,” he concluded.
Zamil hits OCTG market running
Saudi Arabia gained a new entrant to the pipe casing and OCTG end-finishing market this year, with the arrival of Saudi Seamless Pipes Factory Company, better known as Zamil Pipes.
The company had its inauguration in April this year, and expects to produce around 50,000 metric tonnes of cased pipe by year end.
“The brand new facility, which covers 30 hectares of Dammam 2nd Industrial City, has an annual capacity of 240,000 metric tonnes each year,” explained Ayman Tambal, sales and marketing engineer. The facility houses state-of-the-art production equipment for the heat treatment, threading and testing of pipes for critical well applications used by Aramco.
“Zamil Pipes was established to address the needs of the drilling industry for locally supplied OCTG pipe,” said Tambal. The company, a division of the Zamil Group, has signed an exclusive inspection agreement with NOV Tuboscope. “This is important because it means Tuboscope will only offer inspection on our production in the Kingdom,” said Tambal.
GCC pipe fittings and flanges business looking up
A tough start has marked out the first half of 2010 for the pipe fittings and flanges suppliers in Saudi Arabia. However, as many of the greenfield projects put on ice are thawing out, the outlook is much rosier heading into the new year according to Hamed Ali Baig, country manager, Saudi Arabia, Gerab National Enterprises.
“There is no doubt this year has been a tough year for us, and everybody. I think we are looking to breakeven this year,” said Baig.
“Quarters one and two were very tough across the GCC, but we expect this quarter to be much healthier and we have seen signs that the business is coming back on quite fast,” he added.
Gerab is hoping SAOGE will be a gateway to new customers and partnerships both inside Saudi Arabia, and around the Middle East.
“We are to promote our solutions to the oil and gas industry as well as petrochemicals. We are well known for our pipe fitting, flanges, gaskets and valves, but we are really trying to promote our project package solutions,” explained Baig.
In Saudi Arabia, Baig said, enquiries are up on the first half of the year, and that the firm has been shortlisted for a number of projects. “We are waiting on the final green light on some quite big project orders here, and I am optimistic about securing more work in the project packages sector before the year is out,” he added.
Gerab hoped to use SAOGE to capture the attention of some of the EPC companies in attendance. “We have arranged some good meetings already, and I expect some more to happen before the end of the show,” said Baig.”
Also exhibiting on the Gerab National Enterprises booth is Arab Desert LLC, the Oman division of the company. Munir Ansari, country manager, Oman said that his performance expectations were in line with the Saudi Arabian experience, and that some upstream opportunities within the Sultanate held some encouraging potential.
Sour gas resistant steel is a big hit
Saudi Arabia is a key market for Dillinger Middle East, and the company is hoping to boost its business ties with Aramco in the coming year, according to Randhir Venugopal, general manager.
The company has been in operation for 325 years, and has been active in the Middle East for the past 12 years.
“We are specifically targeting oil and gas as a sector. Offshore platforms, pressure vessels and line pipe are the key products we are promoting in this region,” said Venugopal.
Overall, more than 60% of the company’s business is derived from the oil and gas sector.
[banner]]
Dillinger Middle East is promoting its high-end specialised products . “We are interested to speak to potential customers of our special products like our sour gas resistant DICREST plates for the Middle East region,” said Venugopal.
The company’s mill in Germany is currently working at capacity, following a huge order to provide steel for the giant pan-European Nord Stream project.
Nord Stream is a gas pipeline to link Russia and Europe. It will transport up to 55 billion cubic metres of gas each year.
“In the Middle East line pipe is one of our biggest areas of success, but we have also seen an uptick in demand for pressure vessels and heat exchangers, and captured a lot of the dowstream related project work too,” he added.
2011 Cutting and welding demand to rocket in KSA
The upcoming mega-projects in the refining and petrochemicals scene in Saudi Arabia will make 2011 an unprecedented year of activity, according to Ron Barker, Saudi Arabia country manager for ESAB, the world’s largest manufacturer of welding and cutting equipment.
“In the last two weeks work here has really suddenly come out of the floodgates. All of the budgetary work we have been doing over the last twelve months has come to fruition. I think the first six months of next year are going to be massive in terms of work volume here in Saudi Arabia,” he said.
Though many of the big ticket items in the pipeline for ESAB will come from the downstream projects in the Kingdom, Barker said that upstream work has maintained a fairly solid level in 2009 so far.
“Of course with the scale of Aramco’s operations, upstream work is ongoing, it never came to a halt. Smaller pipelines and plant upgrade work have largely continued as normal this year, but when SATORP and Yanbu refineries get underway the volume of work will be just phenomenal.” ESAB’s extensive range of equipment is displayed on booth 214.
New valve automation firm to open in 2011
Mahabes Company chief executive Mazen Bader was on site at SAOGE to promote the Eastern Region’s most exciting valve automation, actuation, testing and service start-up company.
Mahabes is currently in advanced stages of construction and is scheduled to open its brand new facility in the first quarter of 2011.
“I think timing wise we have been quite fortunate. Business has been quite slow but steady right now. In many ways this is the right time to start up, and then grow with the market,” said Bader.
The company is looking to a broad base of customers, and will be targeting primarily the oil and gas, refining and petrochemicals sectors. “Aramco used to buy everything themselves, but there has been a trend towards lump sum turn-key contracts. This means there are more players in the market with real purchasing power,” explained Bader.
Initially the company will focus all of its efforts on building up a portfolio of clients in Saudi Arabia, but Bader said expansion is one of the company’s goals. “To begin with we will be targeting work in the Eastern Province, but we aim to expand our service capability to serve the GCC.”
The company is currently undertaking auditing from the firms it hopes will become its customers, but the CEO is hopeful that will be complete this year.
“We will be targeting all of the oil and gas related industries, obviously Saudi Aramco, but also in time lots of petrochemicals, desalination and power plant work too,” said Bader. The company is currently hunting for skilled staff to help take the company to full operational readiness early in the new year.
Mahabes is a joint venture, formed with China’s SHK Valve Group. “SHK is one of the most aggressive valve companies in China. This is the first time they have undertaken a JV in Saudi Arabia, and it is a first for us, but I think this is good –we are both very aggressive and hungry for business,” said Bader.
