Teodoro González
Director General

Energy Sector Opportunities for Pipe Manufacturers

Wed, 02/19/2014 - 15:16

One of the towering infrastructure projects for Mexico’s future is the Los Ramones pipeline that is set to supply 20% of Mexico’s natural gas demand. This infrastructure will ensure the availability of natural gas that will enable the country to pursue its economic growth targets based on a reliable and cost competitive energy supply.

Large infrastructure projects in Mexico are international and many companies are crowding to participate in the bids. As a pipe supplier, Tubacero is one of the main Mexican players in the value chain of pipeline’s development. This company won the bid to supply the 118-km Phase 1 of the Los Ramones pipeline. Tubacero attributes its success to participating aggressively in the bidding process and taking advantage of the competitive advantages that being based in Monterrey offered. “Los Ramones is the most important project for us,” says Teodoro González Garza, Director General of Tubacero. “Being based in Monterrey gave us an important advantage in logistical terms; bringing tubes from Korea, India or Germany would be more difficult than producing them here,” he adds.

By working with local companies to manufacture pipes and develop pipelines, Mexico is drawing immediate benefits, such as job creation and collecting more tax revenue. “There was a willingness from the companies in charge of the project, PEMEX and IEnova, to work with Mexican companies,” comments González Garza. Tubacero has worked on many pipelines constructed by CFE in Tamaulipas, Morelos, along the Pacific Coast and for the Chihuahua-Sinaloa line, among others. “We have taken advantage of our production capacities and our technical capacity to make high quality pipes,” states González Garza.

Natural gas demand is set to rise and companies have started to position themselves to meet the needs of the market. Pipe providers play a crucial role in the development of infrastructure and have become important contributors to lowering installation costs and construction times. “Tubacero is now building a plant for coiled tubes that are more affordable and are also used in pipelines,” says González Garza. Even though coiled tubing is not a new form of technology, it was not used to transport hydrocarbons in Mexico until it was recently approved for natural gas. The materials are now more affordable and larger tubes are being manufactured, increasing costcompetitiveness. “We have been preparing for this for the last four years and we have doubled our production capacity,” comments González Garza.

Another important challenge that exists when developing pipelines is preventing corrosion and maintenaning the installations. Suppliers of the project developers must comply with rigorous quality control schemes from the outset. “From the beginning of the steel production process, we have our engineers measuring the liquid steel when it is being cast. When it is turned into plate or coils, we already know that the steel meets the customer’s quality standards,” says González Garza. The junctions between pipes have the highest probability of corrosion. By providing 80-foot instead of 40-foot pipes that are welded with an automatic machine, Tubacero pledges that higher quality is present throughout the manufacturing process. These longer tubes also reduce the amount of welding by half, which removes half the potential structural problems. Tubacero is confident that its installation processes and maintenance activities will ensure the long-term optimal performance of the pipeline. “There are pipes that are 65 years old and are still working with no problems,” González Garza says. In the particular case of natural gas, this fossil fuel is notably less corrosive than other hydrocarbons, reducing wear and tear on the piping.

“Giving contracts for the construction and operation of pipelines to the private sector will become an important factor in the expansion of Mexico’s natural gas pipeline network. Important cities with important industrial clusters are still lacking access to natural gas through pipelines, which creates tremendous business opportunities,” comments González Garza. Tubacero is also considering expanding its activities to other important areas of the energy sector. “The production of towers for the wind industry is an area of interest for us. The core business of Tubacero is piping, but we believe we can do a lot in the hydrocarbon and renewable energy sectors.”