TMK IPSCO became one of the latest steel producers Dec. 7 to announce a mill expansion that will help provide tubular products for the oil and gas industry.
The number of manufacturers within the U.S. oil and gas supply chain announcing similar investments is expected to increase in the years ahead with the development of shale gas, according to recent studies.
Between 2010 and 2035 shale gas development will account for $1.9 trillion in capital expenditures, IHS Global Insight reported Dec. 6 in a study on the economic impact of shale gas. The steel industry is one of the primary sectors already benefiting from the increased development.
Steel accounts for 21% of shale gas capital investments, IHS reports. This includes such materials as lining, casing and tubing.
The TMK IPSCO expansion at its Wilder, Ky., facility is a partnership with Ferrous Metal Processing Co. to install a slitting line at a new 43,000-square-foot building that IPSCO will lease to Ferrous. The new slitter will be the largest in North America when it begins production in the fall of 2012, IPSCO says. A slitter cuts steel sheets into narrower strips to match customer needs.
"The expansion of shale exploration has had a major impact on our overall company development, including our initiatives at the Wilder facility, said company spokesperson Ivonne Baez."Improving the technology and strengthening the efficiency of our operations at the Wilder facility will help us to better service our customers who are drilling in the region's shales."
On Nov. 30, steel pipe producer V&M Star said it planned to build a new threading facility in Youngstown, Ohio, to accommodate increased demand from shale gas drilling. The facility will be located next to another planned mill the subsidiary of French company Vallourec has begun building.
Chemical producers also plan expansions related to the shale gas boom as they take advantage of the lower-priced feedstocks.
The IHS report noted several planned chemical-industry investments, including Royal Dutch Shell's world-scale ethylene cracker in the Marcellus Shale region and The Williams Cos. expansion of its Geismar, La., olefins production facility.
Further support for the development of shale gas resources is expected Wednesday when the National Association of Manufacturers and PricewaterhouseCoopers host an event in Washington, D.C., to release their "Shale Gas and U.S. Manufacturing" report.
The report will analyze the major economic benefits associated with the abundance of shale gas, including cost savings, U.S. plant expansion and jobs growth, NAM said.