OREANDA-NEWS. With Its 1.5 Million Tonnes of Pipes Produced, VSW Becomes Global Leader in Pipe Manufacture As of December 25, Vyksa Steel Works (VSW, Nizhni Novgorod Region), part of United Metallurgical Company (OMK), has produced 1.5 million tonnes of pipes. Accordingly, based on the results of 2006, VSW will become one of the world's largest pipe manufacturers.

According to the press service of OMK, as compared with its performance in 2005 (1 million tonnes), VSW has increased its production of pipes of various sizes by more than 50%.

For OMK, 2006 will become a peak year – the enterprises of Company's Pipe-Rolling Division will increase its pipe delivery by 40% up to 1.6 million tonnes (as compared with 1.1 million tonnes in 2005).

For its overall large-diameter pipe production in 2006, OMK has also become one of the world's leaders (823 thousand tonnes of LDP).

The doubling of VSW's pipe production in 2006 resulted from the fact that the LDP complex reached its designed capacity at the time of launch of Russia's largest pipeline projects – Gazprom's NEGP (North European Gas Pipeline) and Transneft's ESPO (Eastern Siberia-Pacific Ocean Oil Pipeline) projects.

At present, VSW is the only supplier of 1,420-mm longitudinal pipes used by Gazprom for the construction of onshore sections of NEGP, and meets 40% of Transneft's needs for 1,220-mm pipes for its ESPO project.

Having mastered the production of 1,420-mm single-seam longitudinal pipes designed for pressures of up to 250 atmospheres, OMK has for 18 months been a leading innovator in the Russian pipe market. According to OMK President Vladimir Markin, "Our most important competitive edge is primarily based on the fact that we produce high-technology products – the most sophisticated pipes in Russia. We strive to always be one step ahead with regard to the quality of our produce. In 2007, VSW is supposed to manufacture its first commercial batch of large-diameter pipes rated for working pressure of 220 atmospheres designed for subsea pipeline systems according to DNV (Det Norske Veritas, Norway) standards."

Its mastery of production of pipes according to DNV standards will qualify OMK for the participation in construction of subsea sections of NEGP and the projects related to development of shelf zones – specifically, the Shtokman deposit. Over the last three years, more than $300 million has been invested in the reconstruction of the VSW LDP complex.

OMK plans to increase in 2007 the capacity of the 1,420-mm pipe production line up to 950 thousand tonnes a year, with the total LDP production capacity to be increased by 2008 to 2 million tonnes.