* US energy market targeted with investment
* Long-term financing eyed
* Investment to double Borusan Mannesmann EBITDA
ISTANBUL, Dec 24 Borusan Mannesmann,
Turkey's leading steel pipe manufacturer, said it would invest
$150 million in building a plant in the United States to tap the
shale gas boom.
"This will be an investment to benefit from the advantages
of shale gas production. It is an investment totally targeting
the American energy sector, which uses smaller pipes or pipes
mainly for drilling," said Agah Ugur, chief executive of parent
company Borusan Holding.
A shale gas revolution has swept the United States, lowering
gas prices and helping to displace more polluting coal. The
country is one of the largest and most advanced of shale gas
producers, with almost a third of its gas coming from shale.
Fracking, or hydraulic fracturing, involves pumping water
containing chemicals into shale rock formations at high pressure
but critics say it risks contaminating aquifers as well as
potentially causing earth tremors.
Ugur said Borusan planned to meet a third of the investment
through its equity capital and the remaining two thirds via
"Our first target regarding financing will be to obtain a
long maturity project loan from the United States, we also plan
to partially finance it through incentives," Ugur said.
"The investment will double Borusan Mannesman's EBITDA
(earnings before interest, tax, depreciation, and amortisation)
and will boost its annual sales by 60 percent," he said.
The facility, which is seen starting operation in the second
half of 2014 and which will have an annual capacity of 300,000
tones, is expected to yield an annual revenue of $500-600
million depending on steel prices, the company said.
Shares in Borusan traded 2.99 percent higher at 27.60 lira
by 1027 GMT.
Borusan is the parent company of Borusan Mannesmann
and Borusan Yatirim.