Vallourec aims for new markets in South America
Vallourec is expecting to do new business in at least six countries in South America within three months. Owner of eight industrial sites in Brazil that export different diameters and steel grades to Southeast Asia, the Middle East, Africa, and South America, Vallourec intends to enhance Brazil’s strategic position and expand its operation in South America.
By late 2023, Vallourec wishes to complete the transfer of its industrial plant in Germany to Brazil, where it will produce 18 5/8″ pipes. According to Bruno Gontijo, OCTG executive manager – South America, the company stands out in competition because of the integration of its activities in the country.
Amid the geopolitical instability, the executive affirms that customers need to keep their E&P activities with a “nearshore” supplier, to reduce production costs and disruptions of supply logistics chains. “We have a large business volume in Guyana and Colombia, for instance. Only Vallourec can supply them directly from Brazil,” says Gontijo.
The company recently entered into a 10-year agreement with ExxonMobil in Guyana to supply Line Pipe products. In Suriname, it aims for new business by 2024. In Brazil, it manufactures up to 14″ seamless steel pipes for the Peregrino and Bacalhau projects, operated by Equinor. In the latter, which is quite challenging because of the pressure of the pre-salt layer, Vallourec delivered pipes manufactured from processes that gave the material high strength and robustness. “The pipes we made to Bacalhau are the crème de la crème,” says the executive.
In the Brazilian onshore, the renewal of mature fields made the company diversify its business relationship and reduce the costs of depending on only one client – in that case, Petrobras. “Our portfolio in 2022 equals the levels we had in 2014. We should consider we have a positive perspective for the next years because of the forecasts for oil production in Brazil,” states Gontijo.
"Green Pipe," the pipe with a root
Operating for 70 years in Brazil, Vallourec deployed its plants in Minas Gerais, a region with plenty of iron ore reserves. The plant also has eucalyptus forests, harvested for the charcoal used as fuel in blast furnaces. The Brazilian energy matrix, one of the cleanest and most renewable ones on the planet, delivers fewer CO2 emissions equivalent to one ton of steel produced.
Seeking the “green pipe,” the company developed the patent of equipment that mitigates greenhouse gases. We finished one, and we will produce three more. The goal is 30 units by 2030. “This is an automatic furnace where we put the eucalyptus on the top. Charcoal comes out underneath. All the generated gases are fed back into the equipment. The emissions will go down,” says the executive.
Vallourec’s operations focusing on the oil and gas industry are in Minas Gerais, on Barreiro and Jeceaba plants, producing seamless steel pipes. The company is the owner of Vallourec Tubular Solutions (VTS), with branches in Rio das Ostras (RJ) and Serra (ES), for specialized O&G services; and Vallourec Tubos para Indústria (VTI), with production sites in Minas Gerais and São Paulo, for welded and seamless steel pipes and tubular solutions for the industry in general.
The Florestal plant produces charcoal for the blast furnace, while the Mining plant meets the domestic needs for iron ore supply.
As for energy transition, Vallourec is gathering its offers under a new brand and trade name, Vallourec® New Energies, to meet CCUS, geothermal, hydrogen, and solar markets. The company is currently studying ways to meet the carbon storage market in Brazil, requiring deep knowledge of material selection.
By Felipe Salgado – On 10/24/2022 – Editora Brasil Energia
