MENA – a prospective market and trendsetter

Dmitriy Goroshkov, AO Severstal Management. (Image source: Severstal)Dmitriy Goroshkov, director, sales and business development, Energy Sector of AO Severstal Management, discussed developments in large diameter steel pipes

While in many other regions the number of complex projects using large diameter pipes has been decreasing for several years, in the Middle East the opposite is true. Therefore, the region has long been an established market with its own specifics, requirements and standards.

Large diameter pipes: Permanent competition

Due to the fact that the number of upstream and downstream construction projects is constantly growing, companies are looking carefully at the choice of suppliers of large diameter pipes, and the choice is no longer as obvious as it used to be. For the reason that the quality of products is very comparable for all major suppliers nowadays, other competitive advantages are becoming more important factors for choosing a manufacturer of large diameter pipes.

An important factor in the formation of the high cost efficiency of some metallurgical companies in Russia is vertical integration (the full production cycle from raw materials to finished products) and strategic access to the most important logistics channels. It allows to control not only the quality of products at all stages of production, but also the timing, sometimes significantly exceeding the expectations of the customer.

It allowed our company to significantly expand its large diameter pipe (LDP) export pool, with the addition of Egypt, the USA, Bangladesh and UK, followed by Peru, Bulgaria and Brazil in 2021. The company also continues to develop partnerships with international companies, including ones from the Middle East, aiming to start deliveries in this region as soon as possible.

To date, we have successfully completed a number of well-known projects in Europe – 'Turkstream' and 'Polish-Slovak Gas Interconnector', that called for implementing tailored solutions.

For Turkstream, a large volume of 260,000 tonnes of pipes for offshore section has been delivered, where increased requirements for the geometry have been met and a solution to reduce the cost of the project has been implemented.

For the Polish-Slovak Gas Interconnector, more than 11,500 tonnes of large diameter pipes have been shipped in total. The application of 18m long pipes enables cost reduction for the construction of pipelines and enhances reliability and efficiency. To deliver the pipes to the client, a multimodal transportation logistics solution has been implemented, including pipes transportation by road, sea, and rail.

New technology opens new frontiers 

Since we mentioned innovation, I must say that the steel pipe industry is constantly undergoing changes, and the number of projects requiring very specific products is constantly growing, especially in offshore projects. A company should be able to modify its product specification to fit all and every customer's needs, from the very beginning of the manufacturing process. Our company, for example, produces some very specific items to work under non-standard conditions, such as large-diameter LSAW pipes for sour service made of steel grades able to prolong the service life of pipelines transporting hydrogen sulfide-containing substances, and CO2-containing substances.

MENA is characterised by the execution of some very specific projects, where top-tier technology is required. This makes the construction of pipelines somewhat similar to the Russian conditions, where manufacturers are constantly forced to develop additional measures to protect the pipe and, as a result, have achieved great success in this.

ESG is an essential element for business 

Large industrial companies always experience increased public scrutiny for corporate responsibility and safety issues. It is for this reason that Russian industry strives to be deeply integrated into the world community and its standards. For this, the necessary certificates are obtained, and companies take part in ratings to show investors and society serious intentions to ensure the sustainable development of the industry and society.

Our company is systematically implementing measures to reduce greenhouse gas emissions. One of the stages of this work was the definition of a medium-term goal to reduce the intensity of CO2 emissions by 10% by 2030 from the level of 2020. These activities will help reduce the intensity of CO2 emissions from 2.063 tons per ton of steel in 2020 to 1.857 tons per tonne of steel in 2030, which will allow us to enter the top 15 best steel producers with the lowest greenhouse gas emissions in the world.

LDP is a very complex and important market, but thanks to modern approaches to work, modernisation of production, widespread use of innovations and high profitability, Russian metallurgical companies are today among the leaders in the world market for large diameter pipes. 

For more details, visit www.severstal.com

 

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