ATI-Allegheny Ludlum lands $30 million contract for Harrison mill
Only in Harrison.
A $30 million contract landed by Allegheny Technologies Inc. to supply a high-nickel alloy to be used to repair a foreign pipeline break is why the company spent more than a billion dollars to build its state-of-the-art hot rolling facility.
According to company officials, it's currently the only mill in the world that can produce the nickel-based alloy needed for the pipeline repairs in a timely fashion.
“We've been positioning to do this kind of work,” said Dan Greenfield, ATI spokesman. “This is exactly the market we were targeting.”
ATI-Allegheny Ludlum unveiled its new state-of-the-art $1.1 billion rolling mill in 2015. The company plans to produce unique specialty materials for the oil and gas and chemical and hydrocarbon processing markets, according to Bob Wetherbee, ATI's executive vice president of the Flat Rolled Products Group, which includes ATI's plants in the Alle-Kiski Valley.
ATI's nickel-based alloy for the pipeline can be used in extreme corrosive and hot environments, according to Greenfield. “No one else in the world can make a coil of this product the way ATI can and it's because of the Hot-Rolling and Processing Facility,” he said.
Industry analyst John Tumazos, a Wilkinsburg native and owner and CEO of Very Independent Research in New Jersey, echoed that assessment.
“The high-nickel alloy is very hard to roll. It has a much greater hardness than stainless steel, which is why the order couldn't have been placed with any competitor,” Tumazos said.
“Because of the newness of the plant, it has gauge and shape controls to produce a more reliable quality,” he said. “If there were variations in thickness or variations in gauge and shape, it could affect the durability of the pipe.”
But, with majority nickel alloys selling for $10 to $20 a pound, the $30 million order might be for only 2 million pounds, or 1,000 tons — enough to keep the mill busy for one day.
“This is the right class of product for them to make good money,” he said. “If they put together 200 orders like this, they might be having a nice Christmas party at (Harrison).”
ATI declined to disclose the location of the oil pipeline and the name of the customer who awarded the contract at the request of the customer, Greenfield said.
He did confirm that the oil pipeline break was not in United States and that the pipe, itself, will be produced in Asia.
According to a press release issued Thursday, Wetherbee said, “This oil pipeline repair project required an immediate replacement. The customer selected our innovative solution that is enabled by the capabilities of our Hot-Rolling and Processing Facility, which features the industry's shortest production cycle time for nickel-based alloy flat-rolled products.”
ATI will start delivering the alloy in early 2018 and should complete the job by the second quarter of 2018, according to Greenfield.
Mary Ann Thomas and Brian C. Rittmeyer are Tribune-Review staff writers. Reach Thomas at 724-226-4691, firstname.lastname@example.org or via Twitter @MaThomas_Trib. Reach Rittmeyer at 724-226-4701, email@example.com or via Twitter @BCRittmeyer.