The company had previously supplied the commodity market – which would then add value to the pipes with additions such as flanges and galvanising.
With investments from the manufacturer’s parent company, Murray & Roberts, it is now equipped with the technological know-how to supply the highly-specialised oil and gas industry.
MD Barry Pieters says the transition required to manufacture the pipes was possible only with the assistance received from Europipe – a French company – as its technology partner, which provided the local company with the technology transfer.
“We like to think of ourselves as the only company in South Africa that, at the moment, can supply large-bore oil and gas pipes for projects to any specification in the world,” he notes.
The transition from water conveyance to oil and gas dictates more sophisticated manufacturing technology.
“The steel used is different, the quality-control is absolutely onerous, the frequency and number of tests is far greater and the integrity of the welding has to be absolutely perfect,” Pieters adds.
The company has had to undergo this change in order to open new markets for growth and earnings sustainability.
The fact that it is able to manufacture these pipes which, in some cases, cost around R1-million a kilometre, means local companies are now able to save by not having to import, requiring payment in US dollars with all the risks involved.
Despite the fact that the steel price has increased dramatically over the last few months, pipes which are manufactured locally are still less expensive than those from foreign markets.
The high steel price has affected the company in other ways, especially because a high percentage of the cost of manufacturing the pipes is locked into the price of hot-rolled steel coil.
Together with the cost of transportation, the high price of steel has affected the company’s export market adversely .
“Whereas we used to export a substantial tonnage, that has dropped dramatically because the price of steel renders us less competitive,” Pieters adds.
He says, however, that the company’s local market has increased and thus sustained the growth planned for. “Luckily, the internal demand has held up, with some interesting projects,” he says.
One of the projects described by Pieters is the supply of 205 km of 26-inch-diameter double submerged arc welding (DSAW) pipe for Sasol’s natural-gas pipeline from Mozambique’s Temane gasfield to Secunda, in Mpumalanga.
The contract was awarded towards the end of last year, and the company started delivering the first pipes in June 2002.
As of December 2002, the company had supplied around 87 km of pipe and was scheduled to finish delivering its share of the 865-km pipeline by May or June this year.
Hall Longmore is also supplying Sasol with steel pipes for another gas line, this time comprising a contract for 90 km of eight-inch pipes.
The coming year holds as much promise as the last for the company, with a number of projects and goals to look forward to.
Pieters says the company is looking towards developing the Australian export market, which would add to its current US and European export markets.
Locally there is much promise in the mining industry, which will see water projects increasing.
“We are hoping to see quite a number of water projects start with the development of the platinum mines in Mpumalanga.
“We have just completed a 52-km water pipeline for mines in the Steelpoort area and the industry is beginning to talk about other water developments around the country,” he adds.
The company manufactures pipes from two manufacturing processes, electric resistance welding (ERW) and DSAW.
The ERW mill uses edge-trimmed steel coil, which is formed into a long pipe and then a 400 kW high-frequency contact welder is used to fuse the seam. The ERW process is able to manufacture pipes from 219 mm to 508 mm in diameter with a thickness which ranges between 4,5 mm and 12,5 mm.
The DSAW process is used to manufacture spiral-welded pipes, which entails forming a hot-rolled steel strip and welding it both internally and externally.
With this process pipes as large as 2,5 m in diameter can be manufactured with a wall thickness from 6 mm to 18 mm.
The company also carries out external protection of its pipes by coating them in different materials depending on the application.
Fusion-bonded epoxy is used to prevent corrosion and for the protection of underground pipelines.
Sintakote is a fusion-bonded medium-density polyethylene coating which provides resistance to chemical and mechanical damage.
Bitumen fibreglass wrapping is used on pipelines which are to be buried, while liquid epoxy coatings are used on pipes which are exposed to an aggressive external atmosphere, as in chemical plants.
The company not only supplies a world-class pipe to the local and international industry, but is one of the few local manufacturers accredited by the American Petroleum Industry and the South African Bureau of Standards to API 5L, API 5CT and ISO 9001 respectively.