Gazprom and Vyksa Steel Works signed Protocol of intentions

Alexander Ananenkov, Deputy Chairman of Gazprom’s Management Committee, and Anatoly Sedykh, President of the United Metallurgical Company signed the Protocol of Intentions between Gazprom and the Vyksa Steel Works (VSW) for 2004–2007.

Under the Paper, cooperation between the companies pursues the strategic goal of satisfying Gazprom’s needs for the import replacement gas and oil 1,220–1,420 mm pipes.

The Protocol envisages that:

  • in 2004 the VSW, by channeling its own and borrowed funds, will upgrade pipe welding equipment and will develop the straight-seam 1,220–1,420 mm pipe production with the annual capacity of 400 thousand tons;
  • Gazprom will examine the possibility of purchasing 1,220–1,420 mm pipes starting 2005 and will annually specify its pipe requirements based on the existing financial resources, priorities and need to launch new facilities;
  • the parties will set up a working group to coordinate activities aimed at implementing the Protocol of Intentions and will devise the Program on cooperation between Gazprom and the Vyksa Steel Works for 2004–2007;
  • pipes will be acquired on a contest basis.

“Gazprom is set to purchase large diameter pipes from domestic producers provided these pipes are competitive with foreign analogues in quality, grade and pricing. Today, we’ve made another steps towards developing the domestic large diameter pipe manufacturing process,” – stressed A. Ananenkov on signing the Protocol.


1,420 mm pipes necessary for the gas main construction, have not been produced in Russia until 2002.

Starting 1998, Gazprom and Russian pipe manufacturers have been building up their relationships within the Agreements and Programs on sci-tech cooperation, aimed at designing and developing the new pipe manufacturing equipment to provide the gas industry facilities with products meeting strict operational requirements.

As a result of Gazprom’s interaction with the Volzhsky Pipe Plant, the latter started producing 1,420 mm pipes (some 100 thousand tons manufactured in 2003 and about 220 thousand tons targeted for 2004).

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

In 2005 the VSW plans to launch the 1,220–1,420 mm pipe production with the design capacity of 400 thousand tons per annum.

By bringing the above-mentioned pipe plants to design capacity, Gazprom will receive an opportunity to purchase mainly domestic large diameter pipes.

In 2003 Gazprom acquired 640 thousand tons of various types of pipes, including 340 thousand tons in Russia and 300 thousand tons, abroad (including 250 thousand tons in Ukraine).

Just like in the past, most pipes purchased overseas are 1,420 mm pipes. This is due to the inability of Russian pipe plants to fully meet Gazprom’s needs for large diameter pipes.

The United Metallurgical Company comprises the Vyksa Steel Works and the Almetyevsk Pipe-Rolling Mill.

Information Directorate, OAO Gazprom

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