OMK Selected as Preferred Bidder to Supply Pipes for Nord Stream Subsea Section

The Nord Stream Shareholder Committee resolved to sign an agreement with Europipe and OMK for a supply of 1.1 million tonnes of pipes for the first strand of the Nord Stream subsea section. According to the Nord Stream shareholders’ evaluation, both producers proved to have the required competence and capacity for the production and supply of pipes for this Europe’s largest project. Among the bidders were manufacturers from three countries: Germany, Japan, and Russia. Based on the bidding results, pipes for Nord Stream will be supplied by Europipe, Germany, and OMK, Russia.

Pipe shipments for the first strand of the gas pipe line will start in 2008 to be completed in 2009. Under the agreement, Vyksa Steel Works will supply pipes of the most sophisticated segment (diameter: 1,220 mm; wall thicknesses: 30.9 mm, 34.6 mm, and 41.0 mm).

“We believe that this success was achieved not only by our company, but also by the entire Russian pipe industry,” OMK President Vladimir Markin said. “As early as April, OMK became Russia’s and the CIS’s first and the only qualified producer of subsea pipes to DNV-OS-F101. Back then, Nord Stream specialists noted a high technological capacity of Vyksa Steel Works and a high proficiency of its personnel. Based on the bidding results, our company will supply 280,000 tonnes of pipes for the first strand of the gas pipe line. Technologically, the pipes are unique, with their wall thicknesses of up to 41 mm. We think this scope of supply is optimal, as Vyksa Steel Works will also be engaged in the largest domestic pipeline projects during that period.”

The successful bidding results were due to OMK’s large-scale investments in the modernization of its large-diameter pipe-rolling facilities. In 2007-2008, the Company plans to allocate an additional amount of over 5 billion rubles for its further upgrading.