Tenaris : inaugurates Midland service center, enhances presence in Permian Basin

December 05, 2016

Tenaris inaugurated its new service center in Midland, TX, on December 5, 2016 - an investment critical to the deployment of Rig Direct™, the company's new business model of working directly with oil and gas customers to synchronize pipe manufacturing with drilling operations.

The service center is a $36 million dollar, multi-year investment project which handles the storage, inspection, rig preparation and delivery of oil country tubular goods (OCTG), accessories, sucker rods and in the future, coiled tubing.

The Midland service center represents a commitment between Tenaris and the Permian Basin. Many customers and elected officials from the city and county of Midland were in attendance at the ceremony, including Midland Mayor Jerry Morales, Midland County Judge Mike Bradford, and Alba Tellez, Pioneer VP Supply Chain Management.

'I'm happy to say, we've been able to recruit companies of character [to Midland]' said Bradford, 'companies that have proud histories, and more importantly, a future of innovation.' Bradford went on to say he's pleased with the partnership of Tenaris in Midland, stating 'We are hopeful that today is the first step on a long staircase to success for all of us.'

'Pioneer is extremely excited to be a part of this new way of doing business,' Alba Tellez, Pioneer VP Supply Chain Management, said during the inauguration. 'I think that opening this yard is a testament that both companies are here to stay in the Permian Basin and in Midland in particular.'

Tenaris Chairman & CEO Paolo Rocca spoke about the significance of the project and the company's unique positioning in the U.S.

'The investment in Midland represents a major shift in how we serve our customers with increased visibility, flexibility and streamlined logistics solutions,' said Rocca. 'We have decades of expertise in manufacturing. We have a complete product portfolio. We have the industrial system to support an endeavor such as Rig Direct™.'

About 90 percent of Tenaris's OCTG sales in the Permian are through Rig Direct™, which comprises technical consulting, pipe management services and field support.

Tenaris entered into an agreement with the city of Midland and the county in late 2015 for the construction of the service center. The company began dispatching pipe from the facility earlier this year and currently employs about 30, most of whom are local hires.

The Midland service center will complement Tenaris's seamless pipe mill currently under construction in Bay City, Tx. The mill, which will be operational in mid-2017, will allow Tenaris to respond quickly to customers in the US shale plays.

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