Eagle Ford Gas Draws Steelmakers to Texas' Coastal Bend

The voestalpine Group, a Linz, Austria-based  producer of high-quality steel used in automobile and home appliance manufacturing as well as oil and gas applications, will invest $750 million to build hot-briquetted iron (HBI) and a direct-reduced iron (DRI) plants at the La Quinta Trade Gateway that Port Corpus Christi is developing near the town of Gregory. The company expects its "gowest" project to begin operations in December 2015.

The La Quinta site, located at the northern end of Corpus Christi Bay, will also house a $1 billion steel manufacturing facility that Tianjin Pipe Corp.-America (TPCO) is building. The plant, which will produce seamless steel pipe for the oil and gas industry, will represent the largest single investment that a Chinese company has made in a U.S. manufacturing facility.

The addition of iron and steel manufacturing to the Coastal Bend serves as a case study in how the shale revolution can create new avenues for a region's economic growth. Rigzone recently interviewed representatives of voestalpine and TPCO to gain their insights on why the foreign-owned companies decided to locate near Corpus Christi. What follows are excerpts from an interview with Matthias Pastl, voestalpine Texas LLC's head of corporate communications and public relations. (An article highlighting the TPCO project will appear at a later date.)

Rigzone: For readers unfamiliar with manufacturing iron and steel, what does voestalpine produce and which markets does it serve?

Pastl: The voestalpine Group is a steel-based technology and capital goods group and a world leader in the manufacture, processing and development of sophisticated steel products. voestalpine is one of the leading European flat-steel partners of the automotive, white goods and energy industries. Additionally, it is world market leader in turnout technology, tool steel, and special sections, as well as number one in Europe in the manufacture of rails. voestalpine steel can also be found in numerous products, such as the newest Airbus generation, oil rigs, deep-sea pipelines, but also in buildings – for example, the Atomium in Brussels, Wembley Stadium in London and the Burj Dubai, the tallest building in the world.

voestalpine is investing in a natural gas based direct reduction plant with an annual capacity of 2 million metric tons of hot briquetted iron (HBI) in South Texas. HBI is a high-grade feedstock for the production of high-quality steel grades. The $750 million project is voestalpine's largest foreign direct investment and a major step in achieving a low-carbon economy.