OMZ Completes Transaction to Acquire CHETENG Engineering

OMZ OJSC (Uralmash-Izhora Group) announced the completion of a transaction to acquire 100% of CHETENG Engineering s.r.o., a Czech company.

CHETENG Engineering and OMZ Oil and Gas Projects (Izhorskiye Zavody) intend to expand their joint operations in the market for petrochemical equipment and the construction of major facilities in Russia and abroad within the framework of long term plans of OMZ Group oil and gas business development.

Consolidation of engineering and production assets and strategic partnerships with a number of companies in Russia and abroad will allow OMZ to position itself not only as a serious player in its traditional sector of oil, gas and chemical equipment production, but also as general contractor specializing in project management, design, comprehensive supply, construction and assembly of equipment.

In the course of the projects developed by the companies in Russia, CHETENG Engineering acts as a contractor and OMZ Oil and Gas Projects acts as general contractor. Internationally, CHETENG Engineering acts as general contractor and OMZ Oil and Gas Projects assumes the role of contractor.

In brief, the companies’ joint projects include:

• A contract with West-Siberian Gas and Chemical Company for the construction of a gas and chemical complex in Zhatai, Yakutia which is designed to produce 450,000 tons of methanol, 400,000 tons of synthetic liquid fuel and 200,000 tn of ammonia per year. OMZ Oil and Gas Projects acts as general design company and CHETENG Engineering designs technological units for methanol, synthetic liquid fuel and ammonia production on the basis of a licensed design in close cooperation with the general design company.

• Construction of a sea terminal for the transportation of liquefied hydrocarbon gases with 2 million tons annual capacity in Azov, Rostov region. According to the contract with Azovtranzit CJSC for development of a declaration of intent to invest into the sea terminal construction OMZ Oil and Gas Projects is developing the declaration, and CHETENG Engineering will be designer of the project.

The two companies plan to develop a number of joint foreign projects including one in Syria (construction of storage facilities for liquefied hydrocarbon gases with 12,000 cubic meters capacity, gas filling station, and reconstruction of an installation for atmospheric distillation of oil with 2 million tons annual capacity) and another in Egypt (construction of a terminal for storage of mineral oils with 500,000 cubic meters capacity). These projects will allow OMZ Oil and Gas Projects to enter the Middle East market.