Japanese steelmaker JFE Steel Corporation announced on July 26 that it has agreed with Pancheng Yihong Pipe Co. (PYP), a Sichuan, China-based processor of high-quality seamless pipes for oilfields, to acquire a 24 percent stake in the company by purchasing newly issued shares.
PYP is a joint venture originally owned by Chinese company PanGang Group Chengdu Steel & Vanadium Co., Ltd. and Tokyo-based Marubeni-Itochu Steel Inc, with stakes of 60 percent and 40 percent respectively. As a result of JFE Steel's capital investment, these ratios will change to 51 percent for CSST and 25 percent for Marubeni-Itochu Steel.
PYP threads and then sells seamless pipes for oil country tubular goods (OCTG) produced by CSST. In partnership with JFE Steel, PYP aims to expand into Chinese market for high-grade OCTG that offer superior quality to high temperature and high pressure. Under the new agreement, PYP will be licensed for JFEBEAR technology from JFE Steel for all sizes of OCTG with premium thread connections and FOX technology for medium-diameter pipe.
Under an ongoing expansion plan that began in 2007, PYP plans to raise its annual capacity of OCTG from 230,000 tons at present to 330,000 tons eventually.