Salzgitter Scores in Key Middle Eastern, European Pipeline Contracts

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Researched by Industrial Info Resources (Sugar Land, Texas)--In the past two months, Salzgitter Mannesmann International (Salzgitter, Germany) has bagged several oil and gas pipeline contracts in key Middle Eastern and European networks.

The company will supply the Dolphin Energy project with 120,000 tons of X70 48-inch coated line pipe for Dolphin's Taweelah-to-Fujairah gas pipeline across the United Arab Emirates. The contract is worth more than $200 million, and deliveries are expected to start in mid-2008 with completion in the second quarter of 2009. The 240-kilometer pipeline will traverse desert and mountains to link the Taweelah gas-receiving terminal on Abu Dhabi's coast with the power and desalination plant at Fujairah along the coast. The pipe will be manufactured at the Europipe Steel Mill (50/50 owned by Salzgitter and Dillinger Huttenwerke) in Mulheim, Germany.

In a competitive pipeline supply market, Dolphin used a fast-track procurement process to meet delivery targets. Bids for pipeline construction are due by the end of January, and the winning contractor, out of a list nine approved bidders, will be appointed before midyear.

Abu Dhabi's International Petroleum Investment Company has awarded a contract worth $460 million for a crude oil export line to be split between Salzgitter, Japan's Sumitomo Corporation and India's Jindal Saw Limited. The 360-kilometer pipeline will enable Abu Dhabi to deliver more than half of its oil exports (1.5 million barrels per day) directly to Fujairah on the Gulf of Oman. This will bypass the politically volatile Strait of Homuz with Iran on its east coast. Deliveries of the 48-inch pipe are scheduled to start in July and be completed by January 2009.

In September 2007 Australia's WorleyParsons was awarded the front-end engineering contract for the project. ILF Consulting Engineers is the project manager, and China Petroleum Engineering and Construction Corporation is expected to be confirmed as the engineering, procurement and construction contractor for the fast-tracked project due for completion in 2009. The project includes the construction of storage and terminal facilities for the export of crude oil from Fujairah.

In November 2007, Europipe signed a contract with Nordstream (Zug, Switzerland) to supply 75% of the pipes for the 1,200-kilometer gas pipeline from Vyborg, Russia, across the Baltic seabed to Lubmin, Germany. Russia's OMK will supply the balance of 25%. Europipe's $1.4 billion contract is for 860,000 tons of pipes up to the start of 2010. The supply chain contract terms will ensure that more than 400 kilometers of pipes and supporting facilities are in place at logistics sites for construction to begin in 2009 with the first complete pipeline scheduled for 2010.

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