Fulfilling a commercial necessity

“As the first seamless pipe mill in the Middle East, Jesco takes up the challenge of competing with current established suppliers in the region”

Saudi-based Jesco, the first seamless pipe manufacturer in the Middle East, started commissioning of the plant in June and expects to start production of casing and line pipes in fourth quarter 2009. The oil rich region of GCC countries in particular, has been relying entirely on imports to satisfy its seamless steel pipes demand, which reached a peak of 1.16 million tons of seamless OCTG and line pipes in 2006, due to very favorable circumstances. Analysts forecast a continuing growth in the oil and gas segment in MENA region therefore year 2011 should exceed the peak registered in 2006. Almost half of the imports are done by Saudi Arabia as the biggest oil producer in the region with Saudi Aramco as leading Oil Company in the region. Localising seamless pipe manufacturing in the Middle East was a commercial necessity and a strategic decision. Given the growing demand for OCTG pipes in the region, and considering future plans of Saudi Aramco, a mill located close to its needs was long expected and has now become a reality. From the beginning, Saudi Aramco executives supported Jesco’s project and are continuously monitoring the progress. Saudi Aramco professionals are regularly meeting Jesco engineers in order to prepare the commercial operation phase according to Saudi Aramco’s needs.

As the first seamless pipe mill in the Middle East, Jesco takes up the challenge of competing with current established suppliers in the region. The expectations of Mena end-users are built on current supply which comes from approved vendors with years of experience and knowledge in the oil and gas industry. Jesco is committed to meet or exceed such customer expectations. The state-of-the-art technology – supplied by Danieli of Italy and the advantage of  being near the end users of its pipes are two essential keys for Jesco’s success. Started in December 1, 2006, the turnkey project now enters its final stages. To build such a plant for the first time in the region was a challenge in every detail of it. Jesco and Danieli managed to surmount all those challenges through dedicated and experienced project and operating teams.

JESCO project was initiated by Riyadh based – Industrialization and Energy Services Company (TAQA), which owns majority of shares in other oil and gas business related companies: Arabian Drilling Company (ADC), in partnership with Schlumberger, Arabian Geophysical and Survey Company (ARGAS) in partnership with CGG Veritas, while being part of TAQA Al-Rushaid for Marine Works Co. Ltd., CGG Ardiseis and Saipem TAQA Al-Rushaid Fabricator Co. Ltd (STAR). In its strategy TAQA considers complementing its services related to energy sector, localize industry and transfer technologies while attracting foreign investments and equity partners. The integration of seamless pipes manufacturing with its already equipped services to the oil and gas industry will provide better synergies and opportunities for Taqa as a group. From the exploration, drilling and marine facilities for the oil and gas sector to seamless pipes manufacturing, Taqa is an important contributor to the oil and gas industry upstream development. As a seamless pipe manufacturer, Jesco is aiming its best fit within Taqa’s services.

As pipe specifications are continuously improving as per user needs – thereby becoming more demanding in terms of quality and efficiency – seamless pipes rolling technologies have become more sophisticated by incorporating innovative design.

Jesco’s Rolling Line is built on the best available technology – Retained Mandrel Mill (RMM) with three-adjustable rolls stands with five rolling passes. The main technological improvements of three-roll RMM over classic two-roll RMM are:

1. Wall thickness tolerances are considerable improved
2. Pipe surface is smoother – better surface quality
3. More sophisticated steel grades can be rolled successfully
4. Higher efficiency of automatic gauge control (AGC)
5. Better yield by reducing crops length
6. Better outside diameter (OD) accuracy which allows achievement of better tolerances after Sizing operation

The Rolling Line consists of a reheating furnace for billets with a diameter of 30 m, a cone-type cross roll piercer, five rolling passes with three rolls RMM, a walking beam reheating furnace, a sizing mill with up to 10 passes with three rolls, last stand positions with adjustable rolls, a cooling bed, a straightening machine and pipe cutting saws. The maximum productivity depending on size and steel grade is 140 tonnes/hour. The yearly output for the rolling line is 400,000 tonnes of pipes.

The state-of-the-art seamless pipe mill will cover a size range from 139.7 mm till 406.4 mm for OD, with wall thickness starting from 6 mm up to 30 mm. The regional market demands mainly oil country tubular goods (OCTG) pipes and line pipes. Therefore Jesco’s process flow is designed to accomplish API standards requirements as well as supplemental requirements from various oil companies located in Mena.

A heat treatment capacity of 200,000 tonnes per year will allow Jesco to achieve high-strength steel grades, as well as steel grades designed for sour services, considering API 5CT and API 5L all steel grades can be manufactured by Jesco.

Finishing operations are done in two dedicated lines consisting in threading machines, hydro testing units, coating units and specific controls for threaded and coupled pipes. One of the two finishing lines has the capability to cut premium connections and to apply phosphate on pins. Non-destructive tests are performed in two quality assurance lines including EMI and UT test (electromagnetic and ultrasonic). In-house laboratories able to perform all standard tests as well as dedicated tests (high-collapse and sour-service) will certify the compliance of Jesco’s products. The storages are designed to fit with various process stages purposes, each crane being supplied with wireless terminals. Danieli’s level three software will allow Jesco to optimise all its manufacturing processes, integrating with the purchasing and sales functions. All equipments are manufactured by reputed suppliers as Danieli, Kocks, PMC, Colinet, Bronx and others.

Various automatic control devices are foreseen along the manufacturing lines in order to allow better process control and accurate corrections.

The seamless pipe mill project started in December 2006 when the lump sum turn key (LSTK) contract has been signed with Danieli of Italy. Engineering started immediately after signing the contract. Civil Works commenced in June 2007. Mechanical and electrical erection activities started in April 2008. Commissioning is now ongoing. The project is the first of its kind in Saudi Arabia considering the equipment features. The entire rolling line is built on a platform at +6.0 m elevation above ground as well as the heat treatment line which is at +3.2 m above ground. Building the production lines at higher elevation allows better maintenance and access to equipments, which on a classic arrangement would require underground facilities with its inconvenient. In the last years more and more companies choose for this kind of arrangement given the advantages it brings.

The plant site is of 722,000 sq m including expansion area. The Jubail specific soil required intensive improvements being done more than 2000 piles, some of these with a depth of 30 m. The current seamless pipe mill is built inside a building of about 82,000 sq m. In total, there were about 100,000 cubic metres of concrete poured, some 12,000 tonnes of rebar, some 18,000 tonnes of steel structures and some 23,000 tonnes of equipment installed. The power, gas and water required for the manufacturing process were secured and are currently in final connection stages.

Quality system certification according to ISO 9001 started last year and is currently progressing as scheduled. At the end of last year Jesco submitted to API the applications for API 5CT and API 5L certifications.

There are consolidated suppliers of seamless pipes in the Middle East with an outstanding performance to date which Jesco will have to compete with. The strengths of Jesco consist mainly in its newer technology and location, thus shortening the supply chain to its customers. The technical team Jesco hired to manage the project and to run the mill in the first year of operations comes with years of experience in seamless pipe manufacturing, in the fields of rolling, finishing and process control. The raw material supply as well as export sales are done through a worldwide recognized commercial network of Duferco of Switzerland. Premium connections which are largely used in Mena market are developed together with reputed third party in order to allow the company to manufacture and sell high-end products.