In a move that will boost its industrial foothold in Saudi Arabia, Luxembourg-based Tenaris, a leading pipe manufacturer, has completed its acquisition of a substantial stake in Saudi Steel Pipe Company (SSP), a welded pipe producer in Saudi Arabia, from a private group for $141 million.

The company acquired a 47.79 per cent stake in the Tadawul-listed welded steel producer, an agreement which was first announced in September 2018.

The transaction is expected to expand Tenaris’ industrial presence in Saudi Arabia, one of the largest markets for OCTG (oil country tubular goods) and line pipe products, and the range of products it supplies to Saudi Aramco.

Tenaris has been serving the kingdom for nearly a decade and operates two premium threading facilities in Dammam, in the Eastern Province of the Kingdom of Saudi Arabia.

Saudi Steel Pipe, also located in Dammam and now a Tenaris-managed operation, has the capacity to produce 360,000 tonnes of welded steel pipes per year. The company, which started its operations in 1980 and serves energy, industrial and commercial segments, is qualified to supply products to major national oil companies in the region, including Saudi Aramco.

With the integration, Tenaris will add welded pipes, commercial pipes and a full range of line pipes to its existing portfolio, as well as expand its services scope with coating and bending. After consolidating SSP’s results, together it will have more than 1,000 employees in Saudi Arabia. The combined portfolios coupled with the strengthened technical capabilities will allow the company to better meet customers’ requirements.

“The official integration of Saudi Steel Pipe into Tenaris marks an important step to further expand the company’s footprint and capabilities in Saudi Arabia,” said Mariano Armengol, who has been appointed as managing director and chief executive officer for SSP.

“We see clear opportunities for business growth in the kingdom and the region, through expanding SSP’s products and services portfolio and maximising local preference,” he added.

“I would like to recognise the efforts of both Tenaris and SSP teams who contributed to the successful closing of this acquisition. We are very positive to what the future holds in terms of business growth and people development,” Armengol added.

Ahmed Al Debasi, SSP’s former managing director and newly appointed chairman of the board of directors, said: “The integration will strengthen our technical capabilities, allowing us to better meet customer requirements and become an industrial hub for the region,” he added.

SSP operates five pipe production lines, covering an outside diameter range from ½-inch to 20-inch outside diameter which complements Tenaris’s existing offering in Saudi Arabia. Tenaris’ premium OCTG threading facility in Dammam covers a range from 4 ½-inches to 14 inches for the threading of full length pipes and accessories, with an annual capacity to produce 120,000 tonnes.

The combined portfolio will provide Saudi Aramco and regional customers with a comprehensive range of products, which includes welded pipes, commercial pipes and a full range of line pipes, as well as expanded services offer incorporating coating and bending, it stated.
 

NEW CENTRE IN ABU DHABI

The company last month opened a new 33,000 sq m service centre in Abu Dhabi. The new facility has a 25,000 sq m storage area that can house just under 10 kilo tonnes of product and a dedicated inspection line that can process more than 150 connections per day.

“Our commitment to the Middle East continues through our growing presence, getting closer to oil and gas operators in the region to better serve their needs,” said Gabriel Podskubka, president of Tenaris, Eastern Hemisphere.

Renwar Berzinji, vice president of commercial, Middle East, underscored Tenaris’s commitment to provide professional services to customers, take ownership of the entire supply chain process, and ensure that pipes are delivered to the rig site ready to run.

Rig Direct is a service model that Tenaris uses to provide OCTG products and services to customers directly from mill to rig.