An Alberta wholesale distributor of oil and gas drilling fluids, steel pipe and piping products, is teaming up with a Chinese specialty steel manufacturer to produce large-diameter seamless steel pipe in Edmonton.
EDMONTON: An Alberta wholesale distributor of oil and gas drilling fluids, steel pipe and piping products, is teaming up with a Chinese specialty steel manufacturer to produce large-diameter seamless steel pipe in Edmonton.
Edmonton-based Bri-Chem Corp. and Wuxi Huayou Special Steel Co. Ltd. from the Peoples Republic of China, are establishing a new operating company, Bri-Steel Manufacturing Inc. to manufacture the seamless steel pipe.
Bri-Chem CFO Jason Theiss cited long lead times from offshore suppliers as the reason for the jointly owned plant. “This process in North America will cut down on those lead times, while providing the highest quality control that is common in Northern American operations.”
Bri-Chem will own 70% of the voting common shares with Wuxi holding the other 30%. Wuxi will contribute the equipment, training, installation and engineering at a value of $2.1 million while Bri-Chem will provide $1 million of working capital, staff and run the plant, and sell the pipe.
“We have leased a 120,000 square foot facility for this operation,” he said, adding the plant will employ 30 to 35 people.
Outside diameter of the pipe will range from 14 to 36 inches and will be manufactured from carbon steel using a thermal pipe expansion process that heats the steel tubes while being pushed by a horizontal hydraulic press over a mandrel to expand the pipe. After lacquering and stencilling, the pipe will be tested to ensure it meets industry specifications.
Bri-Chem said the TPE process has been utilized for producing large diameter steel pipe for several years in China and Bri-Steel will be the first to introduce it in North America.
The Edmonton operation will be in the commissioning phase starting in February with light production beginning in April.
Under the terms of the agreement, after Wuxi has been repaid its initial capital contribution, Bri-Chem has the option of acquiring all of Wuxi’s shares at a purchase price of $4.2 million.