Alexey Miller, Chairman of the Gazprom Management Committee held today at the Company's headquarters a meeting on cooperation with Russian pipe companies.

Taking part in the meeting were Andrey Kruglov and Vitaly Markelov, Deputy Chairmen of the Gazprom Management Committee, Sergey Prozorov and Igor Fyodorov, Members of the Gazprom Management Committee as well as heads and representatives of the Company's specialized structural units, Gazprom Komplektatsiya, the Pipe Producers Association, United Metallurgical Company (OMK), Severstal, TMK, and Chelyabinsk Pipe Rolling Plant.

Gazprom and pipe producers interact actively under import substitution projects. In particular, such projects apply a new cooperation scheme based on long-term agreements. These agreements provide for batch production, supply, and maintenance of import-substituting products in the amount equal to guaranteed future purchases. Such an agreement has been signed with TMK which produces for Gazprom six types of casing and pump & compressor pipes of cold- and corrosion-resistant design. The manufacture of these pipes will make it possible to fully replace imported ones. The first deliveries of pipes are expected in 2016 for the Astrakhanskoye field.

During the meeting Gazprom and Trubodetal (a subsidiary of OMK) signed a long-term agreement on batch production, supply, maintenance, and repair of special ball valves. These valves will have a diameter of 100–1,420 mm and a working pressure of 42 MPa and will be capable of operating in a harsh environment, when exposed to aggressive media, high pressure, and high content of mechanical impurities. The production will be fully localized: every process operation will be conducted with domestic raw materials and components.

In order to accelerate the introduction of import-substituting products, Gazprom initiated the use of a corporate standardization system and GAZPROMCERT system for the certification of products to be used at the Company's facilities. Moreover, Gazprom is developing its own general specifications to substitute numerous technical standards of manufacturers.

The meeting also discussed a formula-based pricing approach to pipe products. It was noted that this pricing mechanism had proven successful over the years of application due to the high predictability of calculations. The changed market conditions required to update the pricing formulas, in particular, for large-diameter pipes.

That work had been completed. During the meeting Gazprom and the pipe companies singed Supplementary Agreements on price formulas for large-diameter pipes. Furthermore, the meeting agreed to develop a price formula for pipeline fittings.

The meeting produced a number of tasks regarding further cooperation between Gazprom and the pipe companies in the field of pipe product import substitution, certification and pricing.

“Gazprom jointly with pipe companies works systematically on import substitution. We improve the forms of cooperation, broaden the range of domestic equipment, and increase its share in the Company's procurement procedures. Currently, 99.5 per cent of large-diameter pipes in Gazprom's centralized purchases are produced domestically. Our cooperation in import substitution will be developed further,” said Alexey Miller.