Tenaris Invests $10 Million to Upgrade Onne Thermal Insulation Plant

Tenaris Global Services has invested approximately $10 million to refurbish and upgrade the five-layer thermal insulation line at its Onne plant in Rivers State, creating what the company says is the only five-layer thermal insulation facility in sub-Saharan Africa.

The investment follows the completion of a coating campaign for the Bonga North deepwater project, located in waters more than 1,000 metres off the Nigerian coast.

The Bonga North campaign

The work involved two distinct coating processes carried out in Nigeria: three-layer polypropylene anti-corrosion coating and five-layer polypropylene thermal insulation coating. Both were executed on an accelerated schedule, according to the company, demonstrating that technically demanding offshore work can be done locally rather than shipped abroad.

The upgrade brings advanced coating technology closer to the customers who need it and strengthens Nigeria's industrial base in a service segment that is critical to deepwater development. Thermal insulation keeps produced fluids at a temperature that prevents the formation of wax and hydrates, which can block flowlines in deep, cold water.

Why local capacity matters

The facility was commissioned at an event at the Federal Lighter Terminal in the Oil and Gas Free Zone at Onne, which also marked 25 years of Tenaris operations in Nigeria. The ceremony drew government and regulatory figures, including the Minister of State for Petroleum Resources (Oil), Heineken Lokpobiri, while the Special Adviser to the President on Oil and Gas, Olu Verheijen, delivered a virtual keynote.

The strategic point is local content. Historically, complex pipe-coating for deepwater projects was performed outside Nigeria, adding cost, lead time and foreign-exchange exposure to projects. Establishing the capability locally means Nigerian projects can source a specialised service domestically, retain more of the value chain in-country and reduce dependence on imported services.

Surviving the lean years

Tenaris said it maintained its Nigerian operations during a difficult period between 2014 and 2023, when reduced project activity and market uncertainty forced several pipe companies to close and engineering, procurement and construction firms to exit. It retained its oil country tubular goods threading facility in Onne, continued training its workforce through local and international assignments, and kept its coating capability ready for renewed demand.

That continuity is now paying off. As upstream activity picks up, particularly in deepwater, the company has positioned itself to capture work that would otherwise go overseas. The Bonga North contract is the first major deployment of the upgraded line.

What to watch

Watch whether the upgraded plant secures further deepwater and subsea coating contracts as Nigeria's upstream investment pipeline develops, and whether other operators follow Shell, Bonga North's operator, in sourcing specialised coating locally. The plant's utilisation will show whether Nigeria's local content ambitions in oilfield services are translating into a durable industrial capability or a single-project showcase.