January 2013, Vol. 240 No. 1

Features

Hannibal Pipes Aims To Be First

Hannibal Pipes SA was established in 2009 and designed to become the first state-of-the-art Spirally Welded Steel Pipe Mill in the South of Spain serving the local market as well as the international one with particular respect to Mediterranean area.

The investment coincided with the acquisition of land strategically located close to the Madrid–Cartagena railway. After a stone-laying ceremony in May 2010 the plant began production in May 2011.

Last year it began the second-phase of its investment with the installation of a new production line for manufacturing small and medium diameter SAW spirally welded steel pipe. That investment, according to Hannibal Pipes officials, allows for even more precision and is specially designed to meet demanding specifications with their technical partner, Byard Spiral Steel, one of the main suppliers of equipment for SAW Spirally Welded steel pipe production. Hannibal Pipes also designs and manufactures a large range of steel special pieces, like bends, T connections, sleeves, couplings, etc., in accordance with clients requirements.

Nicola (Nick) Calvo became cofounder and managing director of Hannibal Pipes in 2009. Calvo, a native of Turin, Italy obtained a degree in business administration at the Milan-based Bocconi University and and later worked for the carmaker Pininfarina and then for Ernst & Young. In 2002, he joined the international pipe-coating contractor Socotherm (now fully owned by the Canadian Shawcor Group) where he his positions ranged from Director of Business Development to Managing Director of Spanish, Australian and Middle East subsidiaries, to COO with responsibility for the direction of subsidiaries.

Calvo describes his philosophy as an effort to make things easier by reducing complexity, costs and bureaucracy. He shares that vision with his partners and continuously tries to transfer it to Hannibal Pipes working team.

Interestingly, the company has a specific tie-in with a very famous namesake whom Calvo discusses later in the interview.

P&GJ: What was the strategy leading to the creation of Hannibal Pipes? Is it primarily for oil and gas pipelines?
Calvo: Hannibal Pipes SA was established in 2009 with the target of becoming the first state-of-the-art spirally welded steel pipe mill in the South of Spain serving the local market as well as the international one with particular respect to Mediterranean countries, North Africa and Latin America.

With an installed capacity of about 110,000 tons, Hannibal Pipes manufactures and supplies tubular products for oil and gas, water, piling, infrastructure and concentrated solar power with diameters from 8 to 100 inches and thickness up to 25mm.

The company can rely on the internationally recognized Byard Spiral Mill (www.spiralpipe.com) technology, for manufacturing and testing equipment as well as for the design of system and production processes. Hannibal Pipes’ Byard equipment is designed for API projects and in the medium term oil and gas pipelines will become a major target for us.

P&GJ: Where do you see the best market for your products and why?
Calvo: We foresee interesting markets in the sub-Saharan African regions and in Latin America. Right now we are working for a major project in Brazil (the Porto Santos Saipem Marine Base) and we have orders for Colombia and Mexico. Latin America is a very interesting market for large-diameter pipes.

Moreover, Hannibal Pipes can temporarily demob a production line in remote areas providing technical assistance to manufacture the pipes close to the final destination, thereby avoiding logistic costs and increasing local content. We are studying this possibility for a project in Latin America and another in South Africa.

P&GJ:What made the South of Spain a desirable location to build the facility?
Calvo: We decided to invest there after thorough market analysis and our investment had been made considering a long-term strategy. Historically, spiral pipes for Iberian Peninsula had been supplied by only one outdated local producer located in the North of Spain and by several Turkish companies. The clients were looking for someone investing in Spain in order to have a local alternative to the only existing spiral mill that was working as a sort of monopoly.

In the meantime we were looking for an ideal place to produce at very interesting costs while delivering worldwide goods manufactured in the European Union. There are only a few places in Europe where you can get such conditions. We had the opportunity to do the investment close to an already existing pipe-coating factory with good reference in the oil and gas market so we made the decision.

Hannibal Pipes is connected by railway with the Port of Cartagena which is the nearest European port to the Algerian coast and a perfect place to serve North Africa. Basically we are trying to go to North Africa where Commander Hannibal Barca was born in 247 BC. In fact, the company name derives from the Carthaginian commander Hannibal (247 BC Carthage- Libyssa 183 BC) who established a military camp in Hellin, where exactly after 2,000 years the pipe factory would be built. General Hannibal and his elephants in late spring 218 BC departed New Carthage (actually Cartagena Port which is a Hannibal Pipes reference port) for a journey to Italy.

P&GJ: How long did it take to complete the facility, what does it consist of, and what was the estimated cost?
Calvo: The first stone-laying ceremony took place in May 2010 before the Spanish Central Government Authorities and facility’s construction and first line installation were finalized in April 2011.

In January 2012 we commissioned the second line. We have two lines manufacturing SAW spiral pipes from 8 to 100 inches and thicknesses up to 25mm, hydrotest, beveling machine, expander, automatic flow and a full set of QC equipment. We are still investing and today the investment total is approximately US$20 million.

P&GJ: How many people does the facility employ and is there any talk of expansion?
Calvo: We employ 40 permanent plus 40 temporary when we have projects including operation in Cartagena Port where we have eight welding lines manufacturing piling pipes up to 52 linear meters in length.

Yes, the expansion strategy is to have an oversea operation. We are studying such a possibility together with our partner, Byard Spiral Mill.

P&GJ: What makes Hannibal Pipes unique as a pipe manufacturer?
Calvo: We can count on the latest technology, but in the meantime we are very flexible and open-minded. The owners are 100% involved in company management and that indeed is a plus. Clients want to see faces and not have mistakes in terms of responsibilities. In our opinion, the best guarantee that clients can have is to have supplier owners involved in the daily operations.

P&GJ: What are some of the oil and gas projects that Hannibal has been, or is now involved with?
Calvo: Since Hannibal Pipes production started up, no major investment in oil and gas pipeline had been done in Spain. We only managed to manufacture pipes for a small-diameter gas line. We are now working to get API and will be ready before new investments will take place in European Union.

We are now manufacturing something like 15,000 tons of pipes for the Saipem marine base in Brazil. This marine base is going to be built to serve Petrobras “Deep Water” projects.

P&GJ Where is the steel that you use produced and how do you ensure that it meets your specifications for quality?
Calvo: We purchase directly from producers mainly in Italy, Turkey and Russia. Of course all the steel coils come with 3.1/3.2 quality certificates meeting the international standard.

P&GJ: Who are the partners/owners of Hannibal, who are the top executives and what are their backgrounds?
Calvo: We are three partners and each of us is involved in the daily operation. Myself and my Spanish partner have a pipe-coating background. We worked many years for international pipe-coating contractors and, in Spain, we managed to coat the Submarine Balearic Pipeline, the Medgaz onshore and others huge projects. Our Singapore partner has a background in pipe mill engineering and construction.

P&GJ: What is your perspective on new oil and natural gas pipeline construction for the next five years? Where do you expect to see the most activity?
Calvo: In Spain we do not foresee a lot of projects planned. This is mainly due to a lack of consumption generated by the financial crisis. On the other side, France will be much more interesting. North Africa with particular respect to Algeria will have huge projects.

P&GJ: Do you expect the cost of steel to rise significantly and will it be a factor in new construction?
Calvo: We do not have a crystal ball, but we do not foresee major increase within the next few months. In the European Union the economic fundamentals will have a worse impact on new investment and construction.

P&GJ: Do more companies prefer to use spirally welded steel and what is the advantage?
Calvo: The SAW spiral pipe technology had a lot of improvements during the last few years and today spirally welded pipes are also starting to be considered for offshore projects. Today, using off-line welding stations, one spiral pipe production line can have a capacity in excess of 250,000 tons a year.

A lot of companies prefer spiral technology: you can produce pipes according to the length required up to 50 lm or more; you can produce pipes with diameters up to 100 inches or more and provide slip joints in order to facilitate installation; you can cover the whole range of diameters and thickness and supply the project with the full scope of work; you can manufacture pipes according to the length required for each single pipe joint, making life easier for installation contractors. I can go on for a half hour, but I don’t want to become too boring…..