Since the announcement of the 1-million-square-foot V&M Star plant opening in Youngstown, the location has been used as a shining example of the economic development coming with the shale-gas industry to the Mahoning Valley.
The area has seen its first results with V&M Star stating the company produced its first pipe at its Youngstown mill, and the plant is on schedule to begin sales in 2013.
The new mill will support the long-term development of shale exploitation nationally, which is driving demand for small diameter oil and gas pipe and connections. The mill line of products also includes line pipe, green pipe for drill pipe and coupling stock, according to a news release from the company.
After the commissioning of the different equipment of the rolling mill, the first continuous production began Oct. 26, according to V&M.
With an initial production capacity of 350,000 tons of seamless pipe per year, products produced in Youngstown will complement other products made by V&M in North America. The mill will employ 350 people. The new plant will be capable of producing up to 500,000 metric tons of seamless pipe, according to Vallourec, one of the two corporate owners of V&M Star along with Sumitomo Corporation Group.
V&M Star was the first company to take a chance on the Mahoning Valley involving shale, said Tom Humphries, president and CEO of the Youngstown/Warren Regional Chamber. Its efforts was the start of educating everyone about the local shale possibilities.
“They were the first company, and they took the biggest chance,” Humphries said. “When they made their announcement, there was still significant risk involved.”
V&M’s investment originally was reported to be $650 million, but it has increased to more than $1.1 billion, Humphries said. The figure does not include the VAM facility planned by V&M, which is expected to cost $57 million. The VAM facility will make couplings for the pipe.
“They’ve also got a melting facility still under consideration. It would be an additional $350 million investment,” he said. “They’re not done yet.”
The start of production is a big first step for V&M Star locally, said T. Sharon Woodbury, director of economic development for the city of Youngstown.
“V&M has indicated they are happy with the progress as things have moved forward,” she said. “The VAM facility will be the next visible step as they move forward.”
V&M was the first major company that announced it was opening in the Mahoning Valley to serve the burgeoning oil and gas industry in the Utica and Marcellus shales.
Vince Bevacqua, spokesman for V&M Star, said he could not make any comment beyond the news release.