CLA-2-87:OT:RR:NC:N1:101
Robert G. Gaydo, Senior Trade Advisor
Deringer Logistics Consulting Group
6930 Metroplex Drive
Romulus, MI 48174-2000
RE: The tariff classification of oil and gas exploration equipment from Canada
Dear Mr. Gaydo,
In your letter dated November 4, 2013, you requested a tariff classification ruling on behalf of Trican Well Services Ltd of Calgary, Alberta, Canada.
The five (5) items under consideration have been identified as a Frac Blender, a Yard Spooler, a Coil Tubing Picker Tractor, an Iron Truck with Crane and a Coil Tubing Reel and are used in the oil and gas exploration industry; specifically in the fracing and coil tubing operation.
The first item is a Frac Blender. You state in your request that it is a trailer mounted unit that blends fluids, sand and chemicals before the mixture is dispersed to a frac pump for well injection. The trailer has a diesel engine which is run to supply electric and hydraulic power. The trailer has various valves and actuators controlled by the operator from the control cab, which are used to direct the flow of materials to the desired area for circulating, bypassing the mixing tub and/or pumping to the frac pump. There is a centrifugal pump that moves the fluid to the mixing tub where the mixture is blended before being pumped out at low pressure to a separate high pressure frac pump. Sand, which is not stored on-board, is moved to the mixing tub where it is added into the blended fluid prior to offloading the pump.
The second item is a Yard Spooler. You state in your request that it is a stationary hydraulic and electronically operated unit which is connected to an external power source, and designed to move (spool on and spool off) coil tubing from a work reel or a coil tubing unit to change out and/or re-spool the pipe. Coil tubing is used in the fracing industry to move various goods such as sand, liquids, etc. to and from a mixing blender (ie: Frac Blender) and from the blender into a high pressure pump to be delivered down the wellhead. The appropriate tubing would be used depending upon the requirements of the job and the Yard Spooler is able to change that tubing by the winding and/or unwinding of that tubing from the holding reels.
The third item is a Coil Tubing Picker Tractor. You state in your request that it is a crane which is permanently mounted to a Kenworth made and powered chassis. It has two (2) sets of stabilizer legs (fore and aft) and the unit is designed and built to be used at the wellhead to load and unload coil components. The Coil Tubing Picker Tractor will support the injector during the coil operation, but it carries no product itself. The chassis contains a hydraulic well kit installed which runs off of the P.T.O. (Power Take Off) and supplies the hydraulic power to operate the crane. The crane uses wire cables, which measure approximately 9/16 inches thickness, are controlled by a hydraulic winch and are used for lifting.
The fourth item is an Iron Truck with Crane. You state in your request that it is a vehicle with a G.V.W. of 24,300 kilograms (kg), which has a crane permanently mounted to a Kenworth made and powered chassis. Its function is to load, carry and unload the flow lines in the fracing process. In addition, it carries spare radiator fluid and hydraulic oil for use by itself and other fracing vehicles as needed, and has storage space for a hammer, check valves, lifting slings and blocks. The crane is hydraulically controlled and cable operated with a five (5) ton capacity.
The fifth item is a Coil Tubing Reel. You state in your request that it is the reel which hydraulically un-reels and re-reels the coil tubing which is used in the fracing process. The reels are constructed of steel and vary in size depending on the size of the coil tubing to be wound.
The applicable subheading for the Frac Blender will be 8479.82.0040, Harmonized Tariff Schedule of the United States (HTSUS), which provides for “Machines and mechanical appliances having individual functions, not specified or included elsewhere in this chapter, parts thereof: Other machines and mechanical appliances: Mixing, kneading, crushing, grinding, screening, sifting, homogenizing, emulsifying or stirring machines: Mixing, kneading or stirring machines”. The rate of duty will be Free.
In your request, you proposed that the Yard Spooler be classified in subheading 8428.90.0290, HTSUS, which provides for “Other lifting, handling, loading or unloading machinery … Other machinery: Other”. The function performed by the Yard Spooler does not fall within the parameters set forth in the language of heading 8428, HTSUS. It does not lift nor does it handle, but rather it coils and uncoils.
The applicable classification subheading for the Yard Spooler will be 8479.89.9899, HTSUS, which provides for “Machines and mechanical appliances having individual functions, not specified or included elsewhere in this chapter; parts thereof: Other machines and mechanical appliances: Other: Other: Other”. The rate of duty will be 2.5%.
The applicable classification subheading for the Coil Tubing Picker Tractor will be 8705.10.0010, HTSUS, which provides for “Special Purpose motor vehicles, other than those principally designed for the transport of persons or goods … Mobile cranes: Cable operated”. The rate of duty will be Free.
The applicable classification subheading for the Iron Truck with Crane will be 8704.23.0000, HTSUS, which provides for “Motor vehicles for the transport of goods: Other, with compression-ignition internal combustion piston engine … “G.V.W. exceeding 20 metric tons”. The rate of duty will be 25%.
In your request, you proposed that the Coil Tubing Reels be classified in subheading 8431.39.0050, HTSUS, which provides for “Parts suitable for used solely or principally with the machinery of heading 8425 to 8430: Of machinery of 8428: Other: Other: Of oil and gas field machinery”. Section XVI, Note 1 (c) excludes “Bobbins, spools, cops, cones, cores, reels or similar supports, of any material”.
Since the Coil Tubing Reels are for support purposes only and have no mechanical function, the applicable subheading for the Coil Tubing Reels will be 7326.90.8588, HTSUS, which provides for “Other articles of iron or steel, other…other”. The rate of duty will be 2.9%.
Duty rates are provided for your convenience and are subject to change. The text of the most recent Harmonized Tariff Schedule of the United States and the accompanying duty rates are provided on the World Wide Web at http://www.usitc.gov/tata/hts/.
This ruling is being issued under the provisions of Part 177 of the Customs Regulations (19 C.F.R. 177).
A copy of the ruling or the control number indicated above should be provided with the entry documents filed at the time this merchandise is imported. If you have any questions regarding the Frac Blender or the Yard Spooler, please contact National Import Specialist Patricia O’Donnell at 646-733-3011. If you have any questions regarding the Coil Tubing Picker Tractor or the Iron Truck with Crane, please contact National Import Specialist Matthew Sullivan at 646-733-3013. If you have any questions regarding the Coil Tubing Reel, please contact National Import Specialist Ann Taub at 646-733-3018.
Sincerely,
Gwenn Klein Kirschner
Acting Director
National Commodity Specialist Division