Vallourec, a world leader in premium tubular solutions, has strengthened its presence in Saudi Arabia with the acquisition of Saudi Seamless Pipes Factory Limited, better known as Zamil Pipes and which happens to be the first processing company of seamless OCTG (oil country tubular goods) in the kingdom.

Located in Dammam, Zamil Pipes is close to Vallourec’s new VAM threading plant which is currently under construction and due to be commissioned in H2 2011. In complement to this project, the acquisition of Zamil Pipes will provide Vallourec with ready-to-run heat treatment capacity and threading facilities of up to 100,000 tonnes of pipe per year.

With these two operations, Vallourec will reinforce its local presence in the kingdom, through additional finishing capacities and reduced lead-times to serve the premium OCTG market in Saudi Arabia.

Saudi Arabia, through its national oil company Saudi Aramco, is a leading oil producer and one of Vallourec’s main customers with growing requirements for premium OCTG.

‘Unmatched competitive position’

Philippe Crouzet, chairman of Vallourec’s management board, stated: 'With local heat treatment and premium threading facilities, Vallourec and Zamil Pipes will enjoy an unmatched competitive position. The combination of Vallourec’s expertise in VAM premium OCTG technology and Zamil Pipes processing facilities will strengthen the local offer to serve Saudi Aramco and other customers in the Middle East.'

Khalid Al Zamil, chairman of Zamil Pipes and executive director of Zamil Group, said: 'We are proud to contribute to the local establishment of a world-class premium OCTG supplier for the oil and gas industry in Saudi Arabia and wish Vallourec the best of success. This transaction sets the grounds for future developments to contribute to the national welfare of the kingdom.'

The transaction amounts to $135 million and is subject to regulatory approvals. It is expected to be finalised in Q2 2011.

Zamil Pipes was founded in November 2007 to address the needs of the drilling industry by developing Saudi Arabia’s first processing facility for OCTG.

Vallourec Group has a large portfolio of diversified, innovative and high value-added tubular products. It comprises the world’s most extensive range of seamless tubes, with outside diameters of up to 1,500 mm in over 250 grades of steel.

Vallourec’s headquarters at Boulogne-Billancourt, France

Among its main products are oil country tubular goods; drill tubes; tubes for thermal and nuclear power plants; and line-pipes.

Specialising in the most complex and demanding industrial applications (extreme temperatures, high pressure and corrosive environments), Vallourec is a leading global supplier to oil and gas companies, electricity producers, engineering companies and major distributors.

Vallourec, with over 20,000 employees, integrated manufacturing facilities, advanced R&D, and presence in more than 20 countries, offers its customers innovative global solutions to meet the growing energy challenges of the 21st century.

In Q1 2011, Vallourec’s sales volume was 501,000 tonnes, an increase of 46 per cent over the same period in 2010. Net income for the quarter was 82 million euros ($116.5 million), up 35 per cent.

The company generated sales of 4.4 billion euros during 2010.