Eagle Ford Shale Steel OCTG Demand
Steel demand in South Texas due to Eagle Ford shale drilling and pipeline construction is at an all time high with no end in sight. OCTG or “Oil Country Tubular Goods”, is the term used by the steel industry to refer to well casing, tubing and drill pipe used by drilling rigs. According to the Metal Center News, OCTG use is up dramatically across the United States. Demand for steel tubular goods is largely being driven by shale plays such as the Eagle Ford Shale and the Bakken Shale. According to the report, a directional rig may consume as many as 4,200 tons of OCTG per year, compared to 3,000 tons per year for a rig drilling conventional vertical wells. With over 250 rigs working in the Eagle Ford shale, that’s approximately 1,050,000 tons of steel used in South Texas for OCTG use alone. If you add in the tonnage of steel required for line pipe in the Eagle Ford Shale play area, we are talking potentially hundreds of millions of tons. In addition to line pipe and OCTG steel used in the Eagle Ford, thousands of tons of steel products such as rolled steel and cast items are required for building oil storage tanks, pumpjacks, production equipment and vessels. According to officials at the Port Of Houston, steel imports in general are up more than 60% over last year. If demand for oil and current prices hold, we should see Eagle Ford shale steel use climb even further. An EOG Resources company man that I spoke to at Van’s BBQ in Oakville, (near Three Rivers,) put it this way: “If the Eagle Ford Shale were a football game, we are only a couple of minutes into the first quarter.”
Below is a photo of steel line pipe used in Eagle Ford shale pipeline construction project in South Texas. This photo was taken by the author at a pipe yard along the Colorado River, on SH-71 near Columbus. What you see in this photo is just a very small fraction of the amount of pipe being used in Eagle Ford shale pipelines. Both US made and foreign steel is being used in South Texas pipelines.
Line pipe stored in vast pipe yards, such as the one seen above, is destined for Eagle Ford Shale pipelines such as this one under construction near Tilden, Texas (below.)
Steel consumption by shale plays such as the Eagle Ford shale, Utica Shale and Bakken Shale is one factor keeping the industry afloat in an otherwise depressed economy.
Below, rail cars carry steel to an off – loading center north of Cotulla, Texas, in LaSalle county.
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