From Dream to Offshore Reality: Tax Breaks Breathe Life Into Arctic Exploration
Current Issue
№5 May 2012
Table of contents Issue Archive
Oil & Gas
№ 5 (May 2012)
TMK Targets Shale and Offshore on the American Market
Russian consumers have long become used to the fact that local products fall seriously behind their Western counterparts in terms of quality. A common person would prefer a Western-made car, equipment or machines.
By Material is provided by the TMK
Share it! 
TMK poses a challenge to stereotypical mentality and expands business not only in Russia, but also outside the country, by launching premium-class pipe products for the leading sites of global oil and gas production. The OGE correspondent Elena Zhuk has interviewed the TMK Vice-President in charge of strategy and development Vladimir Shmatovich about construction in Edmonton, Canada, of an ULTRA production-service line for premium-class pipeline tapping, which can be used for shale gas production, shipment of casing pipes of the High Collapse series produced by Zarubezhneft for offshore fields development in Latin America, and other successful areas of the company development.
Oil&Gas Eurasia: Vladimir, could you specify the share of oil and gas sector goods in TMK piping output?
Vladimir Shmatovich: TMK focused on oil and gas companies from the very beginning; today they are our key customers, forming about 70 percent of the client list. Our major products specifically target oil and gas segment: oil country tubular goods (OCTG) for hydrocarbon production on- and offshore, including pipes with premium connections, LDP for oil and gas transportation, products for field development and for trunk pipelines.
At the same time, TMK continues to develop its manufacturing for power industry, including nuclear power, shipbuilding, aircraft engineering, agriculture, heavy engineering, construction and public utilities sector.
The chosen strategy was proved correct by the crisis years, when precisely oil and gas segment showed the greatest strength. Today, TMK is one of the key players in the global tubular market. For past three years TMK has been the top global pipe shipper, with a significant share in all high-yield segments of the pipe market.
OGE: Has your product range for power industry changed much over the past few years? If so, how is it linked to the market demand?
Shmatovich: Hydrocarbon production is becoming increasingly complex. The age of “easy oil” is coming to an end. New fields are springing up on the shelf, in the remote and geologically complex regions and in harsh climate zones, including in the permafrost. Quality requirements for pipes are much tighter now. Producers must supply oil and gas companies with the product that is not only reliable, but also unique, tailored, with a specific set of properties. TMK dynamically responds to the changing demand, at times developing exclusive products for each individual well.
OGE: Could you tell us on new products offered by the company over the past year?
Shmatovich: We try to anticipate the market, focusing on long-term trends.
For example, last year TMK has mastered the production of vacuum insulated tubing (VIT) with its unique system of thermal insulation that can successfully counter permafrost conditions. In the fall of 2011 we shipped to Gazprom a pilot batch of premium-threaded VITs for Bovanenkovo oil and gas condensate field; tests were successful, this year we’re starting commercial supply of these pipes. Other key market players also interested in our new product – in 2012 we plan to produce and ship approximately 9,000 linear meters of VIT.
Most of TMK premium products for domestic market match global analogues and are used by Russian companies as import substitutes. This applies also to pipes made from martensite-ferrite chrome-containing steels (these are used in highly aggressive environments containing hydrogen sulfide and carbon dioxide). Russia-based TMK plants started commercial production of casing and production strings made of 13 Cr steel with premium threads TMK GF and TMK FMT. First batch of new corrosion-resistant pipes was shipped to Gazprom and Rosneft. Also, Gazprom has received a pilot batch of superhrome steel cold-resistant casing pipes with TMK GF threads, alloyed with nickel and molybdenum.
TMK is the only Russian company offering premium class gas-tight connections. The company has developed a Russian line of TMK-series premium threads. The ULTRA brand of threads produced at TMK IPSCO, TMK division in the Americas, gained wide recognition in the US and Canada.
Last year, the family of TMK premium threads has received new entries: TMK CWB for casing and TMK PF for production pipes. Properties of the new connections are linked to their usage with the latest drilling and production technologies. Cooperation between the divisions led to Orsk plant mastering the manufacture of the ULTRA thread. This will improve TMK range offered for Russian oil and gas companies.
Along with products for oil and gas segment TMK manufactures pipes for other high-tech industries. In particular TMK-INOX, a joint enterprise with State Corporation Rosnanotech, uses nanotechnology for manufacturing stainless steel and alloyed precision pipes. Such pipes are in demand in the nuclear industry, aircraft engineering, high tech industries.
OGE: What companies are your key customers?
Shmatovich: TMK has built lasting relationships with all major Russian oil and gas companies. For domestic oil producers, TMK is the undisputed leader of the pipe market. Our products are used by Gazprom, Rosneft, TNK-BP, Surgutneftegaz, LUKOIL, Novatek, “SPD N.V.” and others.
OGE: The company is also developing its servicing arm. What servicing do you provide?
Shmatovich: We offer complex solution for oil and gas companies. It implies pipe supply, servicing and post-service support.
We control the entire acceptance chain, our experts are always present at the first landing of the string. Premium thread is a high-tech product and requires some handling knowledge. We train the personnel of servicing companies to work with this premium segment, to monitor the correct performance and parameters to ensure timely repairs. We also provide the required equipment – adapter bushing, sockets and other optional accessories for well strings. In other words, our clients get everything they want, get it right now, with added perk of guaranteed quality and subsequent maintenance service. We can provide turnkey projects, too.
OGE: TMK is successful on the other side of the Atlantic. We know that in March you started construction of a new servicing and production facility for pipes with premium ULTRA threads in Edmonton (Canada). What are the prospects?
Shmatovich: In 2008 TMK acquired assets of IPSCO, Canadian pipe maker, so this market is not entirely unfamiliar for TMK IPSCO. Opened in 2010 TMK IPSCO’s sales office in Calgary (Canada) successfully sells oil and gas pipes. In 2012 we started construction of a new production line in Edmonton. The facility will produce full range of premium ULTRA threads. The customers will also be able to order associated servicing and repair options. In Canada, producers are actively engaged in development of unconventional oil and gas fields, which means higher demand for premium connections. New TMK IPSCO facility in Edmonton is placed in a strategic location in close proximity to such unconventional fields. Installed at the new facility railway infrastructure will ensure a quick response to the demands of TMK IPSCO customers for drilling and supplementary equipment.
Currently the ULTRA line of flash-joint premium threads takes up significant share of the market of premium connections used in shale gas production. Intensive development of shale gas production in North America contributes to higher demand for this high-tech product, allowing TMK to boost the volume of shipments. This led to further TMK investments in expanding the capacity for ULTRA premium threads production. In 2010 the company built a new premium-thread pipe production facility in Brookfield (Ohio); a year later the company had to install a second line due to high demand.
OGE: What offshore projects the company has joined? Why shipment of Russia-made pipes with premium joints to Latin America is a unique experience?
Shmatovich: TMK pays due attention to offshore drilling. The company supplied its premium products for such projects as Korchagin field in the Caspian Sea (LUKOIL), “White Cat” and “ White Tiger” offshore fields in Vietnam (Zarubezhneft).
At Yurkharovskoye gas condensate (NOVATEK) we run two unique string landings. In both cases, the wells received casing strings with TMK PF threads – from the Kara Sea coast and under the sea bottom. The first column was lowered to a depth of 5 km. The second landing was even more complex – the pipe went down for 5,786 meters. Of these, about 3,000 meters was the vertical onshore section, the rest – horizontal underwater section.
TMK recently supplied Russia’s state oil producer Zarubezhneft with casing pipes of TMK-140NS strength group (special High Collapse series resistant to external collapsing pressure) and TMK PF premium gas-tight threaded joints. This kind of product is intended for deep and ultradeep horizontal wells and will be used to develop offshore fields in Latin America.
TMK opportunities to join offshore projects improved after the company successfully certified its premium threads to ISO 13679 standard at the highest CAL IV level. This certificate is a ticket to the Ivy League of the leading global suppliers of pipe products for on- and offshore projects on complex drilling and hydrocarbons production. Our connections TMK PF and TMK PF ET for casing, TMK PF for tubing, as well as ULTRA-QX connections of the North America division have already been certified to this standard.
OGE: What steps are being taken to modernize the production?
Shmatovich: From 2004 TMK had poured some $2.5 billion into its production assets. All production stages have been modernized. To date, larger part of the strategic investment program has been completed.
In the next two years the company will investment in completing its two major construction projects – 950,000-ton electric steelmaking facility at TAGMET and 600,000-ton high-tech production line for seamless pipes with a continuous FQM mill at the STZ plant.
We’re also actively engaged in modernization of technology and equipment for finishing, QA and product testing so as to meet customer requirements for quality of the pipes. At the VTZ plant we plan to modernize the finishing line for casing and “plain” pipes, and the NDT unit. Here TMK will also optimize the production of large-diameter longitudinal welded pipes – for better productivity, expansion of LDP range and complying with the standards and customer specifications. At SinTZ the company will improve the quality of oil country pipes by introducing new and upgrading the existing NDT lines and threading machines, installing new hydraulic press for pipe testing and a new coupling makeup and coupling sleeve equipment.
The project of R&D Center in Houston is also crucial to the company. The building is already completed, now TMK is acquiring and installing laboratory equipment for testing. This year the center is scheduled to go online, obtaining accreditation for the certification of the premium-class connections. The company also plans to invest into expanding production capacity of TMK IPSCO facilities in the United States. The European division of the company is expanding the sales of high market value products. Last year TMK-ARTROM launched a program of events aimed at boosting the production volume of hardened and tempered alloy-steel industrial pipes and cold-rolled pipes.
Implementation of all planned projects will result in using modern technologies for the entire production cycle.
Share it!
Web programming by Iflexion
Copyright © 2008 Eurasia Press (www.eurasiapress.com)