Annual Report 2005 - Tenaris

Confab Equipamentos: investments in modernizing the welding process and buying ultra modern instruments
for non-destructive tests, such as TOFD, Phased Array and Digital Radiography.
.
the low levels of recent years due to lack of funding
for infrastructure works and a lack of regulatory
definition in the sector.
In the overseas market, oil and gas prices remained
high, driving prospecting and drilling activities
and leveraging demand for pipes in all markets.
Especially worthy of note among the company's
export activities were the sales to Argentina, where
the existing gas pipeline network infrastructure
was amplified through the construction of loops.
Outlook
At the end of the year there was a downturn in
the demand for pipes for regional products, mainly
due to the delay in the definition of the second
stretch of the GASENE (Cacimbas-Catu) pipeline,
as well as in Gasfor II and the new loops for the
Argentinean gas pipelines.
The outlook for 2006 continue to be good, as
definitions are expected for the GASENE project
in Brazil and the Loops projects in Argentina.
Export sales are expected to account for a larger
proportion of overall welded pipe sales.
The deficit in gas transportation capacity persists
in Brazil, mainly in the northeast of the country,
where there is significant demand from thermoelectric
power stations. In the south of the country,
where gas is in demand for industrial purposes,
amplification of the gas pipeline network is expected
but depends on definitions involving Bolivia.
With respect to petroleum transportation, Petrobras
has initiated the purchase process for the PDET
offshore project in the Campos basin.
In the mining sector, we have received an order
from Samarco for the construction of a new 345 km
31. Annual Report 2005