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| CNPC Tender At Yearend 08 For 150,000-200,000 Tons UO Pipes? |
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It is likely that China National Petroleum Corp (CNPC) will hold its tender at the end of 2008 to take 150,000-200,000 tons of UO pipes and heavy plates as UO pipe material concerning China's second West-East natural gas pipeline project (WEPP-2), according to information made available in Tokyo. It is understood that the Chinese government is contemplating priming the pump by its positive investment in energy industries besides agricultural measures at a time when the world's energy-related projects are put on the back burner as a whole due to a global economic confusion. CNPC is expected to purchase API-X80 UO pipes in its tender this time that will be used in construction of the east part of WEPP-2 as in the case of the west part. For necessary line pipes in WEPP-2, CNPC bought a total of 235,000 tons of UO pipes in February this year from Japanese integrated steelmakers Nippon Steel Corp, JFE Steel Corp, and Sumitomo Metal Industries Ltd. UO pipe requirements in WEPP-2 are estimated at a total of 800,000 tons, of which CNPC has already secured the first 235,000 tons from Japan. As a result, it follows that CNPC will begin negotiations within this year to take part of the remaining requirements around 550,000 tons. Until now, CNPC is said to have conducted tests to assess the UO pipe capacities of even domestic pipe manufacturers other than those affiliated with CNPC. But the test results are thought to have fallen short of CNPC's expectations. Accordingly, it is considered certain that the Japanese steelmakers will represent main suppliers in CNPC's tender this time as well. Still, there is a possibility that CNPC will place its direct UO pipe order with Baosteel Co Ltd whose new production facilities for line pipes are in operation. In its previous line pipe procurement, CNPC took Baosteel as a supplier of heavy plates for UO pipes. In this connection, it is likely that South Korea's Posco will take part in negotiations on heavy plate supplies to China's pipe manufacturer Julong Steel Pipe Co Ltd in relation to construction of WEPP-2. Besides, it remains to be seen whether European steelmakers will take action to negotiate for UO pipe or heavy plate deals with CNPC this time, with a depreciating euro to the US dollar at present. The European steelmakers were believed to have held back earlier in a fall of their price competitiveness due to an appreciation of the euro. Meanwhile, there are forecasts that construction of a WEPP-3 will start in China from 2010 onward, taking around 800,000 tons of UO pipes in total. Therefore, it follows that CNPC's negotiations on its UO pipe purchases will continue down the road. |
| last modified : Wed 05 Nov, 2008 [10:18] |
