Borusan Mannesmann Seeks to Supply Steel Pipes for Nabucco Gas Pipeline

Borusan Mannesmann Boru Sanayi & Ticaret AS, a Turkish producer of steel and plastic pipes, aims to supply one-third of the pipes for the Nabucco project that will carry Caspian region gas to Europe.

The Istanbul-based company will invest $90 million to more than double its steel pipe-making capacity to 450,000 tons, in order to bid for pipeline projects in Turkey and abroad, Chairman Bulent Demircioglu said in an April 1 interview.

"We want to take a significant part in big oil and gas pipeline projects like Nabucco," which will need 1.3 million tons of steel pipes, Demircioglu said. "We want to provide as much as 500,000 tons of it, or at least one-third."

Borusan Mannesmann produced a third of the pipes for the Turkey section of the 1,700-kilometer (1,050-mile) Baku-Tbilisi- Ceyhan oil pipeline, built by BP Plc from the Caspian to Turkey's Mediterranean coast.

The 7.9 billion-euro ($11-billion) Nabucco Project is led by Austria's OMV AG and is designed to transport as much as 31 billion cubic meters of gas a year through Turkey. Construction is due to begin in 2011. The other partners are Budapest-based Mol Nyrt, Germany's RWE AG, Bulgaria's Bulgargaz EAD, Romania's Transgaz SA and Ankara-based Botas.

Borusan Mannesmann aims to increase its total pipe production by 15 percent to 750,000 tons this year, and raise exports to 220,000 tons from 160,000 tons, Demircioglu said.

"Our aim is to reach 1.05 million tons of production by 2015," he said. "We want to be the biggest producer in the Mediterranean basin."

The company last year sold $255 million-worth of pipes to U.S. gas producer El Paso Corp. for its Elba Express pipeline project in Texas.

Borusan Mannesmann has a "good chance" to increase sales to the U.S., which needs 2 million tons of steel pipe a year, because U.S. authorities have begun an anti-dumping inquiry into Chinese pipe sales, Demircioglu said. The company also has orders for 100,000 tons from Algeria, Hungary and the U.S., and is pursuing a 150,000-ton contract in Nigeria, he said.

To contact the reporter on this story: Ercan Ersoy in Istanbul eersoy@bloomberg.net.

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.