CLEVELAND, Ohio — French oil and gas pipeline company Vallourec is doubling down on Youngstown, investing another $57 million there to capitalize on an expected boom in shale gas drilling.
The new VAM USA threading plant will take steel pipes made at Vallourec’s V&M Star mill in Youngstown and cut threads into them, making the pipes easier to connect. VAM already has threading plants in Houston, Canada and Mexico, but this will be its first in Ohio.
A news release from the French company did not mention how many jobs would be created, but the Youngstown Vindicator reported Wednesday that 100 more people would join the company. Vallourec said some work would start next year with most new work coming in 2013.
VAM USA is a 27-year-old joint venture between Vallourec and Sumitomo, a Japanese steel company.
The new threading plant comes on top of the $650 million V&M is spending to add a second steel mill to its site. That plant should open next year and eventually employ 350 steelworkers.
The company said its increased investment in Youngstown comes from its proximity to shale gas finds in Ohio, Pennsylvania, New York and West Virginia.
In its release, VAM said the facility will be “close to customers operating in both the Mercellus and Utica shale areas.”
Vallourec Chairman Phillippe Crouzet said the Ohio investment and a separate investment to buy a pipe plant in Saudi Arabia are part of the companies strategy to expand.
“Increasingly complex and challenging drilling conditions and important safety and environmental considerations are driving demand for premium” oil and gas steel tubing and threaded connectors, Crouzet said in a written statement.
Drilling for shale gas is more complicated than drilling for oil and gas in other regions. Energy companies have to drill deeper into the shale formations and then inject pressurized fluids into the drill hole to fracture rocks and release gas.
Called hydraulic fracturing or fracking, the practice is opening new areas to gas exploration, but environmentalists have expressed concern that fracking could damage water supplies.
The VAM plant is only the latest gas-related expansion in Ohio. Last month alone, MAC Trailer broke ground a plant in Kent to make tanker trailers to haul fracking fluids to drill sites and Republic Steel announced it would build a new furnace in Lorain to supply steel that could be used in gas tubing.
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