OREANDA-NEWS. May 03, 2011. Joint Stock Company Chelyabinsk Tube-Rolling Plant (“ChelPipe”), a leading Russian producer of welded and seamless steel pipes and tubes, and supplier of integrated solutions for the Russian oil & gas industry as well as a variety of other industries in Russia, is pleased to announce its operational results for the first three months of 2011.

HIGHLIGHTS:

  Steel pipe sales volumes increased to 488 thousand tonnes, up 45% compared to 337 thousand tonnes in Q1 2010. Sales volumes of LDP, OCTG and seamless industrial pipes increased by 94%, 26%, and 33%, respectively compared to Q1 2010.

 Within trunk pipeline systems, hot-formed bends sales volumes increased 232%. Pipeline hub sales volumes rose by more than twenty times and sales volumes of ball valves totalled 811 units, an increase of 55% compared to Q1 2010.

The strong performance in sales volumes of steel pipes and trunk pipeline systems’ core products arose due to an increase in demand from ChelPipe’s major oil and gas customers, primarily Gazprom.

Within oilfield services, Ni-resist iron ESP sales volumes grew 21% as compared to Q1 2010 and reached 600 units. Sales volumes of grey cast iron ESP totalled 333 units, down 14% versus Q1 2010.

 Alexander Fedorov CEO of ChelPipe said:

“We made significant progress through 2010 and commissioned our sate-of-the-art new LDP mill, Vysota 239, despite unforeseen industry challenges.  In March 2011, Vysota 239 produced 52 thousand tonnes of LDP and I am really proud of ChelPipe's team that completed the project and brought the mill up to full capacity within such a short period of time. In Q1 sales volumes from the new LDP shop totaled 131 thousand tonnes, including 114 thousand tonnes shipped to Gazprom’s pipeline project “Yamal-Ukhta-Torzhok”. We are confident that relationships we have developed over many years with our key LDP customers and suppliers, including Gazprom, Transneft and MMK, provide a solid foundation for a long-term sustainable business”

STEEL PIPE PRODUCTS

In the first quarter of 2011, ChelPipe steel pipe sales volumes reached 488 thousand tonnes compared to 337 tonnes in the same period last year. The increase in sales volumes was mainly due to sales to Gazprom from the new LDP mill, Vysota 239. Sales volumes from Vysota 239 totaled 131 thousand tonnes, including 114 thousand tonnes to Gazprom’s pipeline project “Yamal – Ukhta - Torzhok”. In the fourth quarter of 2010, sales volumes from Vysota 239 totaled 61 thousand tonnes.

OCTG sales volumes totaled 63 thousand tonnes in Q1 2011 up 26% compared to Q1 2010 and up 32% compared to Q4 2010 sales volumes, primarily due to an increase in oil and gas exploration activities.

TRUNK PIPELINE SYSTEMS

Sales volumes of hot-formed bends totaled 2,776 tonnes in Q1 2011, up 232% and 38% over Q1 2010, mainly due to sales to Gazprom’s pipeline project Bovanenkovo-Ukhta. In the first quarter of 2011 sales volumes of pipeline hubs increased more then twenty times and reached 333 tonnes. This increase corresponds to Gazprom’s pipeline project “Sakhalin-Khabarovsk-Vladivostok”.

During Q1 2011 ChelPipe sold 811 units of ball valves, up 55% over Q1 2010, mainly due to an increase in demand from the power generation industry.

OILFIELD SERVICES

As a part of the strategy aimed at focusing on Ni-resist Iron ESP production, ChelPipe increased Ni-resist Iron ESP in Q1 2011 to 1,315 units, a 102% increase compared to the same period last year.

As of 31 March 2011 ChelPipe serviced 7,587 oil wells in Russia, a 33% and 30% increase over 31 March 2010 and 31 December 2010 respectively.