AlgomaTubes Grand Opening

AlgomaTubes

Grand Opening

Approximately 120 customers from across Canada, regional governmental authorities, key suppliers, and members of the Canadian media attended the event. Although the plant began operations in November 2000, the Ribbon Cutting , hosted by Jorge Mitre, Algoma Tubes Managing Director, was held on this occasion. The day-long activities included a plant tour as well as a cocktail reception.

Technical and commercial experts were on hand to field questions pertaining to the company’s services and products. According to Duane Felt, Inventory Management Technician of Suncor Energy, “the new AlgomaTubes and Tenaris Group has proven itself as a first rate organization and the view of the plant was exceptional”.

The actual production facilities include hot rolling, heat treatment, and finishing processes which combine to provide a capability from 23/8" to 103/4" in the grades demanded by

Canadian industry.

Tenaris Seamless:

Steaming Ahead

in Canada

Shell Canada and Canadian Natural Resources Ltd. are utilising Tenaris manufac-tured pipelines to supply their steam injection wells. In June 2001 Tenaris-manu-factured steam lines began operating at Shell Canada’s Peace River complex in Alber-ta. This was the first time that a Tenaris mill had sup-plied steam lines in Canada. Although conventional oil reserves in Canada are declin-ing, the development of heavy oil and bitumen is thrusting Canada into an energy renais-sance with reserves estimated at approximately 1.7 to 2.5 trillion barrels of oil buried under the soil of North East-ern Alberta.

However, precisely because the oil is so heavy, convention-al extraction methods with pumping systems would pro-duce only a small number of barrels per day. Accordingly, over the last few decades, Canadian oil companies have developed an extraction tech-nique whereby steam is inject-ed into the reservoir in order to heat and thin the oil, dras-tically improving the flow and production rates.

From left to right, John Rowswell, Mayor of Sault Ste. Marie; Carmen ▼ Provenzano, M.P.; and Jorge Mitre, Managing Director of AlgomaTubes.

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Launching Edition. March 2002

Inside

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Who is Who at Tenaris Canada

BP Canada

Charity Classic

PSAC

Outstanding

Service Award

Jorge Mitre, AlgomaTubes Managing Director.

Brad Lowe, AlgomaTubes Commercial Manager.

Fernando Frecha,

AlgomaTubes Operations Manager.

Paul Young, AlgomaTubes Quality Manager.

AlgomaTubes is headed by Jorge Mitre, who has been working in the Group for almost fifteen years. Jorge has an electrical engineering degree and also earned a Masters in Industrial Organization.

On September 10, BP Canada successfully held its Second Annual Charity Golf Classic in support of the Calgary Interfaith Food Bank. As one of the major sponsors of this event, Tenaris was pleased to assist BP in their charitable endeavor.

Commented Wayne Mitchell, Chairman of the BP Organi-zing Committee: “BP has a long history of support to the community and this event was a fantastic way to raise money for this worthy cause.” Brad Lowe, General Manager of TenarisNetwork Canada, agreed: “Our investment in the community of Sault Ste. Marie through our improve-ments in the AlgomaTubes plant are only part of our interests in Canada. We also have the aim to add value to the community at large, and this includes support of the communities where our customers live and work.”

Each year the Petroleum Services Association of Canada recognizes individuals from member companies with Outstanding Service Awards. This year David McHattie, AlgomaTubes Marketing Manager was one of the award recipients. Dave received this award for his leadership as Chairman of the Education Fund Charity Classic and his contribution to the revamping of the PSAC’s Forecasting and Well Cost Studies.

Fernando, as a mechanical engineer, formerly worked in the automotive industry and joined Siderca in Argentina and SPIJ in Indonesia in the production area. Fernando was appointed as

AlgomaTubes Operations Manager in April 2001.

Paul has a Bachelor’s degree in Applied Sciences. Since 2001 he is responsible for the metallurgy, testing, and quality programs at AlgomaTubes. In his career, Paul was Mill Metallurgist, Product Metallurgist, and Managing Metallurgist with Algoma Steel from 1972 to 2000. Paul participated in the development and refinement of several products designed for sour service and other applications.

Lorne Vaugeois, OCTG Sales Manager, TenarisNetwork

Lorne is responsible for OCTG Sales in Canada since last year. He has extensive experience in the Canadian pipe supply industry. In his career Lorne has worked with several pipe supply companies including Comco Pipe and CanTak. He has held many positions including Sales Manager with CanTak whom he worked with for the last 15 years.

Russ Strilchuk,

Line Pipe Sales Manager, TenarisNetwork

Russ has a Bachelor’s degree in Bio Chemistry. Russ has worked in many roles within the steel industry including both technical and sales capacities. He most recently held the position of Technical Sales Representative for Shaw Industries, an international pipe coating firm.

Tenaris operates in Canada through both its manufacturing facility, AlgomaTubes, and its customer service center in Calgary.

Brad has a Bachelor’s degree in Commerce, with a major in Finance. He has recently been appointed as General Mana-ger of TenarisNetwork in Canada and he is also respon-sible for all commercial activities of AlgomaTubes. Brad has been working with Tenaris since July 1999.

AlgomaTubes Integrated Supply

Channel for the Automotive Industry

As part of its efforts to provide customized supply chains to meet the precise needs of the customer, AlgomaTubes has redesigned the supply chain for Ingersoll Machine and Tool (IMT) in a way that integrates manufacturing,

procurement, distribution, and commercial service. IMT is a major automotive, OEM and defense manu-facturer and supplier. One of many products includes an axle component system to the tractor-trailer industry. As part of its manufacturing process, IMT uses seamless pipes to create the axle system. IMT uses seven different combinations of outside diameter, wall thickness and material grade in their process. Focusing on techno-logy, engineering and

The solution to the

commercial needs of IMT was to customize a stocking plan that would enable IMT to release truckload quantities to multiple locations of the exact products they need, when they need them. This process has been so successful for IMT that AlgomaTubes is also managing a multi-year inventory from previous suppliers at the Tenaris Canadian facility. “To meet the unique accounting requirements of IMT, we have designed an invoicing system where IMT receives separate invoices for the pipes and services. Since all of the products and services are made in Canada, IMT is no longer subject to currency risk.” explained John Kearsey. The benefits of the solution, according to Janice Vickery, Purchasing Agent of IMT, are “with one source for pipe, cutting to length and delivery responsibility, AlgomaTubes has streamlined our deliveries to enable us to focus on our production and our customers.” on time delivery, IMT

products are shipped throughout North America and around the world to serve the global trucking industry. AlgomaTubes worked closely with IMT to redesign their supply chain. IMT previously purchased an imported tube with cutting, storage and handling services from a third party. IMT was subject to currency risk when invoiced separately in the foreign currency for the material and in the Canadian currency for other services.

The redesign solution

customized to the needs of the client, created a service centre at AlgomaTubes facility, in Sault Ste. Marie, to serve their needs at the source of manufacture. Not only is AlgomaTubes manufacturing

the pipe to the client's proprietary specification in Canada, but also it has installed a new finishing area to provide the entire cutting, bundling, and stenciling services needed. AlgomaTubes redesigns its supply chain integrating manufacturing, procurement, distribution and services, to better serve customers.

▲ John Kearsey, originally responsible for the commercial development and implementation of this business, has also been responsible to set up and manage the cut to length production line and just in time deliveries.

▲ Self-Steer Axle produced by Ingersoll Machine and Tool (IMT) with AlgomaTubes’ pipes.

AlgomaTubes

Grand Opening

Tom Behanick, Commercial Director from April 1999 to December 31, 2001 described during the plant tour “our customized services include product design, proprietary grades for specialized applications, materials management and on-site assistance for each specific market segment.”

AlgomaTubes serves the oil and gas, automotive and mechanical industries in Canada.

Jorge Mitre on his side stated, “locally focused services and products include an improved line for mill threaded premium connections, proprietary steel grades for sour service applications, a new cutting and finishing line for the tight tolerances of the Canadian automotive industry, and customized inventory

programs of finished and unfinished materials for the Canadian energy and automotive industries.” The plant tour included visits to Finishing Line #1, used

among others, for heat treated pipes with UT requirements ranging 41/2"to 123/4"and also the Threading Line #1 (41/2" -103/4").

AlgomaTubes is located in Sault Ste. Marie, Ontario, and currently employs over 200 people. The contribution to the local economy is reflected in the company’s position in the top five private employers in the community. “It means a whole host of things, all positive,” said Sault Ste. Marie Mayor John Rowswell. “Reopening the tube mill is also good news for the city’s

commercial assessment base,” Rowswell added.

Several members of the tube mill staff have been to one of the eight production facilities Tenaris has around the world, to get familiarized with production methods and with the rest of the Group’s system and its people. Tenaris is a strategic alliance that includes seamless steel tube makers Dalmine (Italy), Siderca (Argentina), Tamsa (Mexico), NKKTubes (Japan), Tavsa (Venezuela) and AlgomaTubes, and welded tubes

manufacturers Confab (Brazil)

and Siat (Argentina). “Our Canadian operations are part of our strategy of locating near the customer,” affirmed Martín Pochtaruk, Procurement and Logistics Manager at

AlgomaTubes, adding: “Tenaris Canadian deliveries and forwarding activities accounts for almost 200,000 tons a year, ensuring our customers receive their orders when and where they need them.”

AlgomaTubes is the sole Canadian producer of seamless steel tubes for the domestic industry.

Continued from page 1

▲ Carmen Provenzano adressing the comunity-related importance of AlgomaTubes and Tenaris Group. John Rowswell and Jorge Mitre.

Tenaris Canadian deliveries and forwarding activities accounts for almost 200,000 tons a year, ensuring its cus-tomers receive their orders when and where they need. Tenaris warrants product quality and delivery across the supply chain.

Each year, Tenaris delivers 1.5 million tons of steel tubes and 3 million tons of other steel products via 1,300 seaborne vessels calling at 184 ports in 75 countries.

Logistics

At an event in Calgary, Juan Carlos González, Tenaris Product Director; Gabriel Carcagno, Manager of Product Development for Premium Connections; Gustavo López Turconi, Tenaris Oilfield Services Product Manager; Tom Behanick, AlgomaTubes Commercial Director; and Paul Young, AlgomaTubes Quality Manager made several presentations. Shell Canada’s Malcolm Hay, made a special presentation on the Drilling and Completions Committee’s Industry Recommended Practice (IRP) for critical sour drilling.

Attendees at the event liked what they heard. Stated Rob Brown of RJB Quality Elements: “The mix of Malcolm Hay and Shell Canada’s leadership in sour service analysis with Tenaris’ leadership in the design of these materials made for an insightful seminar.” Technical Information Tenaris has developed OCTG Grades with high resistance to Sulfide Stress Corrosion Cracking (SSCC). Available in

yield strengths ranging from 80,000 to 110,000 psi, these products are designed to provide outstanding performance in severe sour conditions. Although hydrogen sulfide is non-corrosive in the absence of water, if moisture is present, the gas and the oil become

corrosive. Cracking takes place when the combination of tensile stress, material susceptibility and hydrogen content becomes excessive. Sulfide stress cracking is basically a hydrogen embrit-tlement phenomenon. 160 120 80 40 0

TENARIS GRADE 110 SOUR SERVICE

-3 s NOMINAL +3 s USL

FREQUENCY

HRC

22 27

Mean: 25.85 HRC Sigma: 72 HRC 460 Readings Upper Specification Limit (USL): 29 HRC

22.5 23 23.5 24 24.5 25 25.5 26 26.5 27.5 28 28.5 29 29.5 30

▲ Hardness distribution for 7"x12, 65mm - 110SS Grade

Tenaris Rolls Out TN Series

Pipelines are used to transport the steam from the central pro-duction plant to the outlying wells. Steam is injected down the well and out into the reser-voir. Oil and water are then recovered from the reservoir to surface, and the regular process of oil production can begin. Shell utilizes its Soak radial technology, which includes drilling a vertical well with multiple horizontal arms extending from the single well bore. Steam is injected through the well for about two months, followed by produc-tion through the same vertical well. The new soak radial technology has improved ener-gy efficiency, especially in the ratio of oil produced for each barrel of steam injected. Similar steam injection tech-nology is also used in Califor-nia, Venezuela and Indonesia, but it is in Canada where the technique is being continually pushed to the limits and where the temperatures and pressures are highest.

Precisely because of the high temperature and pressures involved, the steel for the line pipe has to be particularly strong in terms of mechanical properties, and be able to resist temperatures up to 370º C and pressures of 2200 psi.

Tenaris carried out an inves-tigative study and extensive tri-als in order to produce a new X90 (CSA Grade 550) line pipe ranging from 10-24 inches in diameter, at its mills in Mexico ( Tamsa)and Italy (Dalmine). The project involved also the supply of mother pipes for bending.

Steaming

Ahead in

Canada

Continued from page 1

The hydrogen ions (formed in a cathodic reaction) are small enough to enter the metal, which causes the steel embrit-tlement. Under stress, the embrittled metal readily cracks. Tenaris has developed carbon low alloy steels that are obtained through state-of-the-art manufacturing processes that provide the steels with physical, chemical and metallurgical characteristics that ensure their outstanding resistance to hydrogen sulfide cracking.

Main characteristics of Tenaris Sour Service steel grades

Clean steel

Deep desulfurization

Low residual-elements content Tight chemical composition range Low residual stress

No cold-worked spots Excellent hardenability High tempering temperature Fully tempered martensitic structure Through-wall micro structural homogeneity Through-wall hardness homogeneity Fine grain structure

High-impact

Low wall thickness variation (eccentricity) Low ovality

On October 25, in Calgary, Tenaris presented its proprietary

steel grades, which comply with the Industy Recommended Practice (IRP) for critical sour drilling.

In July 2001, the first shipment of tubes with green protectors was sent to Alberta.

A year ago, red, orange and metallic-colored protectors were seen on Tenaris shipments, stocks and mills. Today, 100 percent of the tubes coming out of Tenaris’ mills have green

Green Protectors Mark Tenaris

The Extra Torque / Extra Compression (XT/XC) version of Antares MS was specially developed to increase the over torque capacity and the com-pression efficiency, without affecting the proven behavior of these premium connections. Sealability and galling

resistance, of the MS remain on the XT/ XC version.

Antares Extra Torque/

Extra Compression

This option for Antares MS Premium Connections, is suitable for drilling casing, drilling liner, horizontal wells and rotating liners.

The Antares family of premium connections has been widely used in several oil and gas fields worldwide since it was launched in the early nineties. Juan Carlos González, Tenaris Product Director said, “more than 380,000 tons were sold in both tubing and casing sizes. This fact, and the several highly

40,000 30,000 20,000 10,000 0 Antares MS XT/XC - IMPROVEMENTS FINITE ELEMENTS MODELS

AMS XT-XC AMS TORQUE FT LB TURNS 0 0.1 0.2 0.3 0.4 0.5 0.6 0.7 0.8 0.9 1 2.5 x T. Opt. 2.0 x T. Opt. T. Opt. = 9300 ft lb

demanding qualification tests performed, constitutes a strong support for these connections to be considered leading gastight T&C premium connections.” Technical description The XT/XC solution for severe compression require-ments consists of a shoulder area, plus a specially designed, and patented coupling internal diameter (ID) that allows the absorption of stresses. This way, the torque maintains the strains in the elastic field, while it keeps the drift of the connection as per API. “Threads are manufactured under very tight tolerances,” commented Néstor Santi, Tenaris Premium Connections Technical Engineer.

This patented design presents both extra compression and extra torque enhanced by

working on coupling’s internal diameter. In addition, though the pin nose thickness is slightly increased, this modification is performed in a controlled way that keeps the pin nose flexible. The shape of the internal diameter of a coupling allows sharing the loads on larger area that the shoulder area of the standard connection. While the shear plane in the standard Antares MS is fully developed, the same plane is being formed from the pin tip to the coupling internal diameter in the XT/XC version. In numbers, the modification produces between 30 to 50 percent extra-torque capacity compared to the standard design.

Suncor required specialized pipes with specialized connec-tions to perform in their Steam Assisted Gravity Drainage field (SAGD). Once all of the options were considered, Suncor chose to use a manufacturer that could produce the pipes and the connections in the same manufacturing line. The result was a premium connection that met the deman-ding thermal requirements and at the same time reduced the total product cost.

By combining the production of the pipes and threads at the same location and in an integrated production line, Tenaris is able to manufacture the complete package at the mill. This provides a better delivery, lower potential for handling and shipping damage, and adds cost savings to the end-user. For Suncor, Tenaris produced pipes ranging from 41/2inches to 133/8inches with the premium connection that

matched the drilling requirements. The connections Suncor used were the Antares MS XT/XC, which provides additional torque and compression capability, and Antares MS/SI, which is a specialized design for steam injection

applications, that provides the required torque values along with the thermal sealability.

Suncor with Antares XT/XC

protectors. In a second stage, a new design for protectors will be introduced, though the new green color will be maintained.

Some Tenaris companies had to develop machinery to produce these protectors. “The precise color was hard to

obtain for plastic materials, and plastic protectors cannot be used for some products,” explained Pedro Minaudo, project coordinator.

“But all the mills worked hard to implement the change and it

has been made,” he concluded. ▲ Tenaris tubes covered in green.

Tenaris Takes

On July 19, the Petroleum Services Industry and several selected customers held a fund-raising event for its Education Fund. The event was held at the Cottonwood Golf Club, and included an 18 hole team golf tournament, live auction, reception, and lunch. Roger Soucy, President of the Petroleum Services Association of Canada (PSAC), explained the success of the event by saying: “We changed the name of the event this year, and with the help of all of our volunteers and customers we established a new record by raising over 26,000 thousand dollars to contribute to the fund.”

According to David McHattie, Chairman of the event and Marketing Manager for TenarisNetwork: “This is an important cause for the oil and gas services industry and Tenaris is proud of our participation. Our donation of time and our role as a lead corporate sponsor is an example of our commitment to the Canadian oil and gas industry.”

While the Tenaris team of Derrick Bickell (PanCanadian Petroleum), Dwayne Kelm (PanCanadian Petroleum), Brad Lowe, and Dave McHattie did not place at the top of the final results, they reported top results in entertainment.

Since last September, Tenaris has a new pipe management operating base. The office is located in Alberta's heart and allows Tenaris to serve its customers better.

John Bilsland, in charge of this centre, states: “For OCTG we mainly operate from the yards of ICO Canada and PeBen Industries. This way, we work

very close to our customers’ drilling operations and can better understand their needs. Our electronic inventory management system, allows Tenaris to work in real time from order to delivery, to better service our customers, adding transparency and speed to the delivering process.”

▲ Tubes ready to be shipped with Tenaris Pack®.

▲ John Bilsland The Tenaris’ plastic rack allows cost-saving, being priced

significantly lower than the market’s most used similar alternatives. The customer can always choose the length of the rack because of its size versatility. In addition, Tenaris Pack® offers a larger contact surface with the tubes, less exposed and safer hoops, and they provide the possibility of rack-embedding, which helps to avoid shifting during transportation.

The new racks for steel pipes were designed to make loading and unloading operations safer for the products, reaching as a result an improvement in quality and also in costs, on account of operation productivity.

This is also a major issue when dealing with coated pipes. Claudio De La Loza, from Tenaris Logistics Operations team, explained: “It is in the shipping stages, where Tenaris generally has less possibilities of overseeing the operation (such as during voyage, unloading and transshipment), that the steel pipes can suffer damages. When dealing with coated pipes, the risk is higher.”

Martín Pochtaruk, Procurement and Logistics Manager at AlgomaTubes, observed: “As Tenaris Canada, we unload our vessels in the Canadian ports. When a second leg of inland transportation is necessary, the tubes are trans-shipped to their final destination. This means a great deal of handling

operations.” Mr. Pochtaruk added, “when so required, because of dealing with 13% Chrome pipe or premium joints for a client in a remote location, we find Tenaris Pack® a great solution. Shipping the tubes already racked from origin (either our Canadian plant or overseas), in the requested transportation units, is cheaper from an operational point of view, as well as it sorts out many concerns to our customers.”

Green Packs for

Tenaris Tubes

Tenaris Pack® consists of a new packing system for steel pipe transportation, allowing each pack to be as wide as necessary, and each tier to hold as many tubes as needed.

See back cover for technical drawings

PSAC Education Fund Classic

Nisku: New Services Office

in Alberta

AlgomaTubes Managing Direction Jorge Mitre [email protected] (705) 946 8134 tel (705) 946 8154 fax Sales Office Brad Lowe [email protected] (403) 514 2276 tel (403) 290 0619 fax OCTG Sales Lorne Vaugeois [email protected] (403) 514 2289 tel (403) 514 0619 fax

Line Pipe Sales

Russ Strilchuk [email protected] (403) 514 2292 tel (403) 514 0619 fax

www.tenaris.com

547 Wallace Terrace, Sault Ste. Marie, Ontario. Canada Tenaris Marketing Communications [email protected]

Advantages

Tenaris Pack® makes loading and unloading operations safer for the products, reaching as a result an improvement in quality and also in costs.

Custom-made racks

The customer can always choose the length of the rack because of its size versatility. In addition, Tenaris Pack® offers a larger contact surface with the tubes.

Single Module

High density

polyethylene Rectangular Steel Tube

Mechanical and Automotive Sales John Kearsey [email protected] (403) 290 0602 tel (403) 290 0619 fax Inside Sales Angus Somerville [email protected] (403) 514 2283 tel (403) 514 0619 fax

Product and Quality Department

Paul Young

[email protected] (705) 946 8130 tel (705) 946 8131 fax

Nisku Service Center

John Bilsland [email protected] (780) 955 1980 tel (780) 955 1982 fax

The best quality Tenaris developed a new packing system for steel pipes transportation. Tenaris Pack® consists of high density polye-thylene modules reinforced with a rectangular steel tube that offers the possibility of having each pack as wide as necessary - maximum 1150mm-, putting up on each tier as many tubes as needed, allowing a maximum weight of 9 MT (20.000 pounds), per unit.

The lowest cost Claudio De La Loza, from Tenaris Logistics Operation team stated: “Though the traditional wooden racks have the lowest costs per ton, they have limited resistance to mistreatment and they get spoilt over time. What's more, for environment conservation reasons, Tenaris is pointing at the substitution of wood elements by similar ones in recyclable materials. Tenaris Pack® is produced with recycled plastic plus it’s 100% recyclable.”

For more information see page 7

Transportation Technologies

Tenaris’ plastic rack allows cost-saving, being priced significantly lower than the market’s most used similar alternatives.