Today, at Gazprom’s Headquarters, Alexander Ananenkov, Deputy Chairman of Gazprom’s Management Committee, and Alexander Abramov, EvrazHolding’s President signed the Framework Agreement on long-term strategic cooperation in producing and selling large diameter pipes.

The Agreement primarily aims to establish the first Russian integrated large diameter pipe technological facility capable to produce high-quality Russian steel pipe products. The Document also envisages an all stage quality control of products made, from steel manufacturing and up to shipping ready-made pipes to consumers.

Under the Paper, Gazprom will engage EvrazHolding in participating in large diameter pipe supply tenders pursuant to the Company’s draft investment programs. EvrazHolding, in its turn, will provide Gazprom with information on new plans to build large diameter pipe production facilities. The parties also agreed that new types of products meeting Gazprom’s requirements will be designed by the leading research institutes, including VNIIGAZ, VNIIST, the TsNIIchermet state-run company and others.

Working groups will be set up for implementing cooperation programs adopted between Gazprom and EvrazHolding as well as for tackling current and topical issues.

“The Framework Agreement signed today is completely in line with Gazprom’s strategy targeted to develop the domestic pipe industry and is another step towards raising the Russian large diameter pipe manufacturers’ competitiveness,” – noted Alexander Ananenkov on signing the Document.

Reference:

1,420 mm pipes used for laying gas mains have not been produced in Russia until 2002.

Starting 1998, Gazprom has been building up its relationship with Russian pipe manufacturers within the Agreements and Programs on sci-tech cooperation aimed to design and develop new pipe types with the view of providing the gas industry with products meeting the highest standards.

Gazprom and the Volzhsky Pipe Plant’s joint activities resulted in launching the 1,420mm pipe production. In 2003 the Volzhsky Pipe Plant produced some 100 thousand tons of the aforementioned pipes, with 220 thousand tons planned for 2004.

In 2002 Gazprom served as a co-promoter of the Nizhny Tagil Large Diameter Pipe Plant.

On 5 April 2004, Gazprom and the United Metallurgical Company (comprising the Vyksa Steel Works and the Almetyevsk Pipe-Rolling Mill) signed the Protocol of Intentions between Gazprom and the Vyksa Steel Works for 2004-2007.

In 2005 the Vyksa Steel Works plans to launch the 1,220-1,420 pipe production with the design capacity of 400 thousand tons per annum.

As soon as the above-mentioned plants reach their design capacities, Gazprom will basically purchase large diameter pipes on the domestic market.

In 2003 Gazprom acquired 640 thousand tons of different types of pipes, including 340 thousand tons, on the Russian market and 300 thousand tons, abroad (including 250 thousand tons, in Ukraine).

1,420mm pipes are still (just like in the past) mostly purchased from abroad due to the inability of Russian pipe plants to fully meet Gazprom’s large diameter pipe needs.

DIVISION OF RELATIONS WITH MASS MEDIA