Gazprom Says Large Diameter Pipe Purchases to Rise 30 Percent in 2011 (Russia)

Wednesday Alexey Miller, Chairman of the Gazprom Management Committee moderated a meeting at Chelyabinsk Pipe Rolling Plant. The meeting was dedicated to the cooperation between Gazprom and Russian pipe manufacturers.

Before the meeting Gazprom’s delegation inspected production sites of Chelyabinsk Pipe Rolling Plant including the workshop turning out “Vysota 239” single-joint welded pipes with a large diameter.

Taking part in the meeting were Members of the Gazprom Management Committee, heads of the Company’s specialized structural units and subsidiaries as well as Ivan Shabalov, Chairman of the Pipe Manufacturers Association Coordinating Council, Anatoly Sedykh, Chairman of the United Metallurgical Company Board of Directors, Dmitry Pumpyansky, Chairman of the TMK Board of Directors, Boris Dubrovsky, Director General of Magnitogorsk Iron and Steel Works, Andrey Komarov, a shareholder of Chelyabinsk Pipe Rolling Plant and Dmitry Goroshkov, Sales Director for Cherepovets Metallurgical Works.

The meeting noted that this year’s activities of Gazprom within such strategic gas transmission projects as Sakhalin – Khabarovsk – Vladivostok, Pochinki – Gryazovets, Bovanenkovo – Ukhta, Ukhta – Torzhok and others called for a significant increase in supplies of large diameter pipes (LDP) versus 2010. The Company plans to purchase about 2.1 million tons of LDP this year, a 30 per cent increase as compared to the last-year indicator (1.5 million tons). By September 21, Gazprom has already been supplied with 1.9 million tons of LDP.

The meeting participants addressed the status of the joint programs for sci-tech cooperation between Gazprom and Russian pipe manufacturers. It was highlighted that these joint efforts helped the Russian pipe manufacturers start turning out new pipe products with high technical and economic parameters.

For example, the new-generation Bovanenkovo – Ukhta gas trunkline system project is using home-made 1,420 millimeter pipes designed for 11.8 MPa of working pressure, which is record high for onshore gas pipelines worldwide.

The competitive ability of Russian products is also confirmed by the fact that 25 per cent of the Nord Stream gas pipeline will be made of home-made LDP.

As a result of the cooperation between Gazprom and Russian pipe manufacturers, the total amount of LDP purchases remains at nearly 90 per cent since 2009.

At the same time, the efforts on creating new pipe types should be intensified so as to provide pipe products for Gazprom’s new projects including South Stream and Shtokman development.

So, for the first time in the global offshore pipeline construction practice it is planned to use 39 millimeter pipelines designed for 27.73 MPa of working pressure for the construction of South Stream in the Black Sea.

Besides, it is necessary to settle a number of crucial issues concerning the pipe manufacture process. One of the issues is supply of hot-rolled sheets (strip) to pipe companies for the manufacture of large diameter pipes. Until recently, Russian pipe manufacturers had to import more than 50 per cent of hot-rolled products. The meeting participants emphasized that in this context the creation of “Rolling Mill 5,000” by Magnitogorsk Iron and Steel Works (production launched in 2009) and the United Metallurgical Company (production to be launched in October 2011) was an important step towards overcoming this dependence.

“Gazprom keeps supporting Russian pipe manufacturers in a sustainable way. We will be committed to this principle when implementing our new ambitious projects and we are ready to give priority to domestic products. However, the priority will be granted only if the domestic products fully comply with our requirements to the price and quality and sustain competition with their foreign counterparts,” said Alexey Miller.

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Source: Gazprom, September 22, 2011;