Russian content: 99.4 per cent

March 23, 2018

Published in corporate Gazprom Magazine Issue 3, written by Denis Kirillov

Gazprom increasing domestic procurements

The Gazprom Group continues to vigorously pursue its import substitution program by engaging an increasing number of Russian suppliers and thereby scaling down its purchases abroad. This is reflected in the operating results of Gazprom Komplektatsiya – Gazprom’s single-source provider.

In the past year, Gazprom Komplektatsiya provided for the centralized procurement of materials & equipment worth over RUB 200 billion. The domestic content in Gazprom’s procurements rose to 99.4 per cent, with Russian small- and medium-size enterprises accounting for over 19 per cent of the total materials & equipment purchases in value terms.

Share of domestically-manufactured materials & equipment in Gazprom Komplektatsiya purchases, 2013–2017







Imported materials & equipment






Domestically-manufactured materials & equipment






Source: Gazprom Komplektatsiya

Gazprom’s demand for materials & equipment was fully met for 49 newly operational and partly operational investment projects in 2017. The bulk of shipments were made for, inter alia, the construction of the Power of Siberia gas trunkline system, the pre-development of the Chayandinskoye field, the laying of the second strings of the Bovanenkovo – Ukhta and Ukhta – Torzhok gas mains, the pre-development of the Cenomanian-Aptian deposits of the Bovanenkovskoye oil, gas and condensate field, the gas infrastructure expansion projects in the Leningrad and Kaliningrad Regions, and for other facilities covered by Gazprom’s investment program.

The facilities required for the commissioning of the main assets stipulated by Gazprom’s investment program for 2017 were provided with materials & equipment in a timely manner.

In the past year, Gazprom Komplektatsiya provided for the centralized procurement of materials & equipment worth over RUB 200 billion.

Complex logistics

To meet the task of fitting out the facilities of the Yakutia gas production center, including the pre-development of the Chayandinskoye oil, gas and condensate field and the laying of Power of Siberia from gas production sites to the Chinese border, Gazprom Komplektatsiya set up a single logistics center that handles cargo shipments delivered directly to construction locations. The reason is that supplies of materials & equipment to the Yakutia gas production center involve a complex logistical scheme with intermediate storage areas. Cargo is delivered to the railway stations of Lena (Ust-Kut settlement), Berkakit, Bolshoy Never, Gudachi, Shakhtaum, Shimanovskaya, Seti, and Sivaki. In Ust-Kut, goods are loaded onto barges, which bring them along the Lena River to the construction areas.

The delivery process is complicated by the extreme conditions of Yakutia, the long distances between construction sites and equipment manufacturing facilities, and delivery constraints due to a short navigation period and the inadequate capacity of the railway stations to carry the goods of required types and volumes. Nevertheless, in the period from 2014 through 2017, construction areas were supplied with 1 million tons of pipe products, as well as 3,600 sets of core process equipment and thousands of units of gas valves and steel valves, special-purpose equipment and instrumentation.

As of early February 2018, the construction of the gas trunkline designed for delivering the “blue fuel” from Yakutia and the Irkutsk Region to the east of Russia and to China was running ahead of schedule. A total of 1,520 kilometers of the pipeline is ready, which accounts for more than two-thirds of the entire section from the Chayandinskoye field to the Chinese border.

Vladimir Alfyorov, Director General of Gazprom Komplektatsiya:

“All of the pipes and fittings purchased by Gazprom last year were produced by Russian manufacturers. As many as 32 capital construction projects were fully equipped. A key portion of the pipes and fittings (64 per cent) was supplied for the construction of the Power of Siberia gas trunkline, a high-priority project of Gazprom’s investment program.”

Largest portion

Pipes usually constitute the largest portion of materials & equipment procured by Gazprom. In 2017, Gazprom Komplektatsiya purchased pipe products with a total value of RUB 117.7 billion. Gazprom was supplied with 922,300 tons of pipes, including 883,800 tons of large-diameter pipes (LDPs) and over 36,300 units of fittings. All of the pipes and fittings purchased by Gazprom last year were produced by Russian manufacturers. As many as 32 capital construction projects were fully equipped. A key portion of the pipes and fittings (64 per cent) was supplied for the construction of the Power of Siberia gas trunkline.

The procurement of pipe products for Power of Siberia is nearing completion in 2018. This is why the bulk of the pipes will be used for the development of gas transmission capacities of the Unified Gas Supply System in the northwestern part of Russia, in particular, for building a segment of the Gryazovets – Slavyanskaya CS gas trunkline so as to deliver gas into the Nord Stream 2 gas pipeline, the procurements for which started in 2017.

All of the pipes and fittings purchased by Gazprom last year were produced by Russian manufacturers.

Resource number two

The second most important stock item in Gazprom’s procurement plan is gas compressor units (GCUs) and accessories. In 2017, Gazprom Komplektatsiya ensured the delivery of 19 GCUs with gas turbines and centrifugal superchargers.

Seven such units produced by Rybinsk-based UEC-Gas Turbines were delivered for the purposes of constructing the first train of a booster compressor station (BCS) at the comprehensive gas treatment unit (CGTU-2C) of the Zapolyarnoye oil, gas and condensate field. Five units made by the Perm-based Iskra Research and Production Association were purchased for the first train of the BCS at gas play GP-3 of the Bovanenkovskoye oil, gas and condensate field as part of pre-developing the field’s Cenomanian-Aptian deposits. The Power of Siberia project was provided with two GCUs produced by Kazan Motor-Building Production Association and three GCUs made by St. Petersburg-based REP Holding for the construction of Zeyskaya CS-7a. Two more units produced by Kazan’s Kazancompressormash were shipped to the Orenburgskoye oil, gas and condensate field for the renovation of BCS-1 and BCS-2.

In addition, six gas-turbine engines made by UEC-Perm Engines and 15 sets of replaceable flow paths produced by REP Holding and Kazancompressormash were delivered to Gazprom’s facilities last year.

Gazprom plans to make a bulk purchase of at least seven GCU sets for its projects in 2018.

In 2017, Gazprom Komplektatsiya ensured the delivery of 19 GCUs with gas turbines and centrifugal superchargers.


In addition to pipes and GCUs, Gazprom Komplektatsiya procures a wide range of other materials & equipment, some of which are also classified as essential.

In 2017, Gazprom was supplied with 98 air coolers and separation filter units (procurement of 55 such devices and units is planned this year).

A total of 133 Christmas trees and 91 casing heads were delivered. Among them were 51 sets of Christmas trees with casing heads customized for the producing gas wells of the Chayandinskoye oil, gas and condensate field, manufactured by Kurgan-based Korvet and Voronezh-based Neftegazdetal Research and Production Association and Voronezh Mechanical Plant, the latter of which is affiliated with Khrunichev State Research and Production Space Center. Gazprom Komplektatsiya also delivered another nine sets of wellhead equipment made by those companies to the Kaliningradskoye UGS facility. Moreover, in 2017 bulk supplies of wellhead equipment were made to the Urengoyskoye oil, gas and condensate field (including the second pilot area of the Achimov deposits), the Orenburgskoye oil, gas and condensate field and the Kovyktinskoye gas and condensate field, as well as to some of Gazprom’s UGS facilities for the purposes of development drilling.


More than 600,000 sets of electrical equipment, communications tools, instrumentation and over 3,600 kilometers of cable products were shipped to Gazprom’s facilities. Items with a total value exceeding RUB 12.2 billion (VAT included) were supplied to 56 capital construction projects under Gazprom’s investment program.

The largest portion of deliveries (24 per cent) was intended for the Yakutia gas production center. Considerable amounts of materials & equipment were also delivered for the pre-development of the Cenomanian-Aptian deposits at the Bovanenkovskoye field and the construction of the Urengoy – Purpe oil and condensate pipeline and the Urengoyskaya oil pumping station. Around 18 per cent of the resources were delivered for temporary structures. This year, Gazprom Komplektatsiya plans to continue procuring materials & equipment for the Yakutia gas production center. In addition, the same will be shipped for the Gryazovets – Slavyanskaya CS section of the UGSS in northwestern Russia.

Import substitution mechanisms

As part of the import substitution program, Gazprom Komplektatsiya analyzes the requests filed by subsidiaries of Gazprom for imported materials & equipment, as well as for resources that include imported components. As a result, in 2017 Gazprom rejected 5,345 requests from subsidiaries for the purchase of imported products and resources with significant imported content. Rejection entails replacing imported products by their domestic counterparts. If there is no possibility of replacement, the purchase should be approved by the permanent Commission of Gazprom.

In order to shape a unified approach to defining the country of origin of industrial products, a special procedure was developed and approved by Gazprom in May 2017. The procedure was communicated to all subsidiaries and organizations. Aiming to harmonize the technical aspects of procurement documents for competitive-based tendering, Gazprom Komplektatsiya monitors, at the design and exploration stage, the potential bidders’ compliance with the requirement on the use of domestic equipment, materials or products with 100 per cent domestic localization.

Gazprom Komplektatsiya runs its import substitution projects relying on long-term contracts for the batch production, supply, servicing, maintenance and repair of import-substituting products included in the List of Priority Products, in the amount equal to guaranteed future purchases, for the purposes of further technological development of Gazprom.

In pursuance of the decisions made at the meetings of the Steering Committee for import substitution and localization of Gazprom’s production assets, Gazprom Komplektatsiya inked seven long-term contracts with TMK, Salavat Catalyst Plant, Tomsk Machine-Building Technologies, Urals Special Valves Plant, Chelyabinsk Pipe Rolling Plant (ChelPipe), Kazancompressormash, and MashTEK. Under the abovementioned long-term contracts, Gazprom’s subsidiaries were provided in 2017 with import-substituting products by TMK (over 696 tons of cold-resistant casings and H2S-resistant casings and tubings) and Salavat Catalyst Plant (around 503.9 tons of silica gel adsorbent).

Moreover, the Company is considering the possibility of signing long-term contracts with Kosmos-Neft-Gas Financial and Industrial Company (for modular wellhead systems with an energy-saving device) and with RGM-Neft-Gas-Service (for coiled tubing units).

In addition to long-term contracts, Gazprom Komplektatsiya continues its import substitution efforts in the gas sector by interacting directly with Russian manufacturers, including via cooperating with the relevant manufacturers’ associations.

As a result, supplies of Christmas trees and casing heads made by Korvet – alternatives to the equipment produced by the U.S.-French Axon’ and the U.S.-Norwegian FMC Technologies –started at the development drilling facilities of the Astrakhanskoye gas and condensate field.

In 2017, Volgogradneftemash successfully completed the pilot operation of high temperature-resistant ball valves DN 1,000 mm (PN 8.0 MPa) at the BCS of the Komsomolsky gas site operated by Gazprom Dobycha Noyabrsk. The manufacturing of high temperature-resistant valves, intended for use in HP/HT BCS facilities for the purpose of gas production and transmission, was launched by Volgogradneftemash under the import substitution program. Operational tests confirmed the performance characteristics of the valves, with the maximum temperature of the operating medium reaching +123 degrees Celsius. No breakdowns or failures were registered.

Gazprom Avtomatizatsiya developed a GCU automatic control system, called Neman-R, and a GCU fire & gas control system based on the Tekon software and hardware produced domestically. The share of domestic components in the devices is about 90 per cent. The products were tested in 2017 and are recommended for use at Gazprom’s facilities.

In the first half of 2017, Saratovgazavtomatika completed factory tests with a prototype of an autonomous power source with a nominal capacity of 2,800 W using air-cooled GTEG-300 gas-fired thermoelectric generators and liquid-cooled GTEG-500 generators. The AIP-2800 prototype is intended for supplying electricity to the block valve sites of the Power of Siberia gas trunkline and for use at the trunkline’s linear sections. The domestic content of the materials and components in the power source is 90 per cent. The device is based on unique engineering solutions and offers considerable energy savings thanks to a heat cogeneration system. AIP-2800 is recommended for use at Gazprom’s facilities.

Fostering development

While maintaining robust demand for high-tech products, Gazprom fosters industrial growth by encouraging an increasing number of domestic enterprises to adopt innovative technologies and equipment, including those new to our country.

In the second half of 2017, Gazprom Komplektatsiya started to supply Gazprom’s facilities with 1,020-millimeter diameter pipes made by Zagorsk Pipe Plant, which had been set up in December 2015. The company manufactures longitudinal electric-welded pipes with a diameter of 508–1,420 millimeters and a wall thickness of 8–35 millimeters. It has the design capacity of 500,000 tons of LDPs per year.

In 2017, centralized deliveries of pipe products with external anti-corrosion coating made of Metaclay materials exceeded 85 per cent of the total LDP supplies intended for Gazprom.

Liskimontazhkonstruktsiya, a company based in the Voronezh Region, started to produce 426–1,420-millimeter pipes rated for the working pressure of up to 32.0 MPa. Verification of the products’ conformity to Gazprom’s requirements is currently underway.

A new plant specializing in pipe fittings – Eterno, a joint project of ChelPipe and Rusnano – tested a new product: hot-tap split tees. The product specifications were approved by Gazprom. Thanks to its unique technological advantages, Eterno meets global quality standards.

Efforts are underway to expand the use of LDPs with external anti-corrosion coating made of domestic materials produced by Metaclay (Karachev, Bryansk Region), a company affiliated with Rusnano. In 2017, centralized deliveries of pipe products with external anti-corrosion coating made of Metaclay materials exceeded 85 per cent of the total LDP supplies intended for Gazprom.

Last year, the existing production facilities of pipe companies started to use an anti-corrosion monolayer coating (instead of a three-layer coating) based on Metaclay’s Metalen PE-21 polyethylene composition. The share of LDP supplies with a monolayer anti-corrosion coating based on Metalen PE-21 exceeded 40 per cent.

The priority areas of cooperation with Rusnano are as follows: producing pipes to deliver natural gas with a high content of carbon dioxide from production sites and manufacturing pipe products for a wide temperature range (from –60 to +350 degrees Celsius) to be used at compressor stations.

On February 15, 2018, Gazprom and ChelPipe signed at the Russian Investment Forum in Sochi a roadmap for the development and batch production of pipes for offshore projects. The pipes will be used in manufacturing domestic equipment for subsea production systems, in particular, manifolds and Christmas trees. In accordance with the document, ChelPipe will adopt the technology to produce pipes from the 25Cr Super Duplex steel and the UNS N06625 nickel alloy. Thanks to these materials, the equipment used in offshore environments will acquire such characteristics as ultra-high strength and corrosion resistance. No pipes of this kind are produced in Russia at the moment.


In 2013, Gazprom started to put into effect the roadmaps for the projects aimed at a wider use of high-tech and import-substituting products and services of domestic companies in the interests of Gazprom, as well as at improving their quality and competitiveness. The first such document was signed with the Tomsk Region. Today, as many as 16 Russian regions choose this format of cooperation: the North Caucasus Federal District, St. Petersburg, Bashkortostan, Mordovia, Tatarstan, the Perm Territory, and the Vladimir, Voronezh, Irkutsk, Kaluga, Nizhny Novgorod, Omsk, Tomsk, Tula, Tyumen and Chelyabinsk Regions.

On October 5, 2017, Gazprom signed roadmaps at the 7th St. Petersburg International Gas Forum to foster cooperation in import substitution with a number of Russian state-owned corporations: United Engine Corporation (UEC, affiliated with the state-owned Rostec Corporation), State Space Corporation Roscosmos, and State Atomic Energy Corporation Rosatom.

Together with UEC, Gazprom plans to develop domestic gas turbines with a wide performance range starting from 32 MW that could be subsequently used at the Company’s facilities, as well as gas turbine power plants for offshore platforms. In addition, it is planned to manufacture components for repairing foreign-made gas turbine engines.

Rosatom will design software for processing and interpreting data produced via seismic and downhole surveys, geological modeling, and reserves estimation in the interests of Gazprom. It is also planned to create LNG production, storage and loading equipment prototypes, pipe fittings, pumping, heat exchange and power units, and components for GCUs.

In cooperation with Roscosmos, Gazprom intends to manufacture equipment prototypes for onshore and offshore production of hydrocarbons, along with compressor, pumping, casing, heat exchange and power units, spare parts for GCUs, and LNG production equipment.

The first prototypes will be manufactured for Gazprom by Roscosmos as early as 2020.

Streamlining procurements

Last year, Gazprom signed 133 contracts with leading manufacturers of pipe fittings, such as Tyazhpromarmatura (Aleksin), Volgogradneftemash (Volgograd), Samaravolgomash (Samara), Penztyazhpromarmatura (Penza), Atommashexport (Volgodonsk), Blagoveshchensk Valves Plant (Blagoveshchensk, Republic of Tatarstan), ROOST-95 (Moscow), Energomash (Veliky Novgorod), Giras (Dolgoprudny), Gusar (Gus-Khrustalny), Enerpred-Yardos (Moscow Region), Murom Industrial Valves Plant (Murom), VARK (Ufa), etc.

In the same year, a banking support mechanism was put in place for resource supply contracts. This helped minimize tax risks, strengthen control over cash flows, and exclude redundant intermediaries from the value chain.

Application and further development of the automated e-procurement system is underway, enabling prompt and transparent interactions with the central procurement management subdivision of Gazprom.

Small-scale procurements are carried out through the specialized portal of the Electronic Trading Platform of Gazprombank (ETP GPB), which provides for smooth interactions between the customer and suppliers. Banking support is also offered through a special section of ETP GPB.

Meanwhile, Russian procurement legislation is changing. In January 2018, a new version of the Federal Law on Procurement of Goods, Works and Services by Certain Types of Legal Entities (No. 223-FZ) came into effect. Substantial changes in the procurement legislation concerned, first and foremost, the procedures for challenging the actions of customers and procurement organizers, determining the initial (maximum) contractual price, setting unambiguous requirements to the document package necessary for procurement publication, and tendering for small- and medium-size businesses solely in electronic form. The changes are meant to eliminate bottlenecks and ambiguities in the legislation and to facilitate the implementation of IT strategies in procurement activities.

In addition to the legislative amendments already in effect, amendments are being prepared to further tighten the procurement requirements and introduce compulsory long-term (for up to three years) planning for procurement activities.