Tenaris inaugurated its new service center in Midland, Texas, on 5 December. The company said it sees this investment as critical to the deployment of Rig Direct, Tenaris’ business model of working directly with oil and gas customers to synchronize pipe manufacturing with drilling operations.
The service center is a $36 million, multi-year investment project that handles the storage, inspection, rig preparation and delivery of oil country tubular goods (OCTG), accessories, sucker rods and, in the future, coiled tubing.
The Midland service center represents a commitment between Tenaris and the Permian Basin. Many customers and elected officials from the city and county of Midland were in attendance at the ceremony, including Midland Mayor Jerry Morales, Midland County Judge Mike Bradford and Alba Tellez, Pioneer VP Supply Chain Management.
“I’m happy to say we’ve been able to recruit companies of character (to Midland),” Mr Bradford said. “Companies that have proud histories and, more importantly, a future of innovation.”
Mr Tellez added: “Pioneer is extremely excited to be a part of this new way of doing business. I think that opening this yard is a testament that both companies are here to stay in the Permian Basin and in Midland in particular.”
Tenaris Chairman and CEO Paolo Rocca spoke about the significance of the project and the company’s unique positioning in the US: “The investment in Midland represents a major shift in how we serve our customers with increased visibility, flexibility and streamlined logistics solutions. We have decades of expertise in manufacturing. We have a complete product portfolio. We have the industrial system to support an endeavor such as Rig Direct.”
Approximately 90% of Tenaris’s OCTG sales in the Permian are through Rig Direct, which comprises technical consulting, pipe management services and field support.
Tenaris entered into an agreement with the city of Midland and the county in late 2015 for the construction of the service center. The company began dispatching pipe from the facility earlier this year and currently employs approximately 30 people, most of whom are local hires.
The Midland service center will complement Tenaris’s seamless pipe mill, which is under construction in Bay City, Texas. The mill, which will be operational in mid-2017, will allow Tenaris to respond quickly to customers in the US shale plays.