Today pipe procurement contracts were signed at the South Stream Transport B.V. headquarters in Amsterdam (the Netherlands) for the second line of the South Stream offhsore gas pipeline.

Pipes will be produced and supplied by a number of world-renowned companies: the Japanese consortium comprised of Marubeni-Itochu and Sumitomo (40 per cent of total output), United Metallurgical Company OMK (35 per cent) and Severstal (25 per cent). The total value of contracts is about EUR 800 million.

Background

The Marubeni-Itochu and Sumitomo consortium consists of Japan's Sumitomo Group companies (financial sector, machine building, electrical industry, ferrous and nonferrous metallurgy, etc.) and Marubeni-Itochu (trading and steel production).

United Metallurgical Company OMK is a large pipe manufacturer in Russia, mainly focused on the production of large-diameter pipes. The leading Russian and foreign companies from 30 countries are among the major consumers of the United Metallurgical Company products. OMK is among the main suppliers of pipes for Gazprom.

Severstal is one of the world's largest vertically integrated steel casting and mining companies with the assets in Russia and the USA as well as in Ukraine, Latvia, Poland, Italy, Liberia and Brazil.

South Stream Transport B.V. is responsible for constructing the offshore section of the South Stream gas pipeline. The company's shareholding is distributed among Gazprom (50 per cent), Italian Eni (20 per cent), German Wintershall and French EDF (15 per cent each).

On January 29, 2014 South Stream Transport signed a contract and launched a tender among Russian and German pipe plants for the procurement of more than 75 thousand 12-meter pipes with a diameter of 813 millimeters (32 inches) for the first line of South Stream's offshore section.

South Stream is Gazprom's global infrastructure project aimed at constructing a gas pipeline with a capacity of 63 billion cubic meters across the Black Sea to Southern and Central Europe for the purpose of diversifying the natural gas export routes and eliminating transit risks. The first gas will be supplied via South Stream in late 2015. The gas pipeline will reach its full capacity in 2018.

South Stream's offshore section consists of four lines each longer than 930 kilometers, made up of 813 millimeter pipes with the wall thickness of 39 millimeters. The unparalleled pipes made of X65 steel designed for an extreme operating pressure of 28.45 MPa will be used during the offshore section construction.

In December 2012 the South Stream gas pipeline construction started near Anapa in the Krasnodar Territory. On October 31, 2013 the first joint was welded at the Bulgarian section of the gas pipeline. On November 24, 2013 the construction of South Stream's Serbian section started.