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'Millions of tons' of line pipe capacity available for pipeline work: producers group

Houston (Platts)--13 Mar 2017 328 pm EDT/1928 GMT


US line pipe producers have "millions of tons" of capacity available to ramp up to provide the steel needed for future US pipeline projects, the American Line Pipe Producers Association said Thursday.

Voicing its support for President Donald Trump's memorandum promoting the use of American-made pipe and steel in constructing new US pipelines, the group said its members and other US line pipe producers have "substantial available production capacity and stand ready to meet demand."

"As a result, using American-made line pipe will not require new mills to be built or prevent pipeline companies from acquiring enough line pipe for their projects," the group said in a statement. Stupp Corp., American Steel Pipe, Berg Pipe and Dura-Bond formed the American Line Pipe Producers Association earlier this year, focusing on the large-diameter segment of the market.

Related story:Factchecking Trump: 'Directive' to buy American steel for pipelines — not quite

In his first week in office, Trump signed a series of executive memorandums to revive the Keystone XL and Dakota Access pipeline projects and has directed the US Commerce Department to make sure all future pipelines built in the US are constructed out of steel melted and finished in the US.

The Dakota Access and Keystone XL pipelines, however, will not be required use US steel as Trump's memorandum is specific to new pipelines or those that are being repaired, the White House said last week. Since Trump's announcement, concerns have been raised that US producers may not have the capabilities to furnish the type of pipe needed, however as imports of large-diameter line pipe have "undercut the US market in recent years ... most US producers [are] operating well below their capacity levels," the association said.

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"We have already made substantial new investments in new equipment and in our workers, so we can meet the demand for American-made line pipe," Mike O'Brien, vice president of sales for American Cast Iron Pipe Co., parent of Alabama-based American Steel Pipe, said in a statement. "We want to maximize the use of US pipeline made from US steel and raw materials."

The US-made pipeline memorandum, announced on January 24, requires the secretary of commerce to develop a plan under which all new, retrofitted, repaired or expanded pipeline within the US use materials and equipment produced in the US, to the maximum extent possible and to the extent permitted by law. The Commerce Department is expected to seek public input and comment in the weeks ahead.

--Justine Coyne, justine.coyne@spglobal.com

--Edited by Richard Rubin, richard.rubin@spglobal.com

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