OREANDA-NEWS. The OMK Group, a leading Russian pipe producer, and NLMK Group (LSE:NLMK), Russia's largest steelmaker, signed an agreement for long-term cooperation. They renewed the contract, which pertained to the supply of steel blanks, until 2016. That contract includes production of wide flat plates at the new Heavy Plate Mill 5000 of Vyksa Steel Works (VSW) and further manufacturing of large-diameter pipes (LDPs).

The agreement was signed by NLMK Group President, Oleg Bagrin, and OMK Group President, Vladimir Markin, at Vyksa Steel Works on November 7th as part of a series of special events dedicated to the shipment of 500,000 tonnes of steel blanks (slabs) to VSW from NLMK. The original contract was signed by the companies in 2012.

According to the agreement, the Novolipetsk Steel Company will supply about 2 million tonnes of slabs with enhanced chemical composition and steel structure standards, and in sizes that are unique for the Russian market, in the years between 2014 and 2016.

NLMK slabs are set to be rolled into wide plates at the VSW's Mill 5000. They are to be further used for the production of LDPs at the VSW electric-weld pipe workshop No. 4. Launched in 2011, VSW's Mill 5000 supplies the plant's large-diameter pipe production capacities with 4.85 m wide plates.

Since the launch of the VSW's Mill 5000 in November of 2011, and September of 2013, approximately 460,000 tonnes of plates have been produced from NLMK slabs.

Cooperation between NLMK and OMK allowed for the replacing of imported plates, thereby significantly improving OMK's logistics and production processes, and ensured a consistently high quality of products for oil and gas companies through end-to-end monitoring of all production stages. The agreement has a strategically important role in the process of replacing imported products of high-level processing, namely pipes and substrate required for their production, by high-quality, domestically manufactured goods.

“Due to the launch of the Mill 5000 and our partnership with NLMK Group, a large-scale sustainable process flow for the Russian ferrous steelmaking industry, from the production of steel to rolling plates and manufacturing large-diameter pipes, has been established. Cooperation with NLMK allows us to be certain in the quality and promptness of our deliveries, and to be able to execute the most complex orders in time,” OMK Group President Vladimir Markin commented on the event.

“Our cooperation, which began last August, made possible the resolution of an important challenge - to eliminate the dependency of Russian pipe manufacturers on imported plates. A hi-tech chain was set up for the production of large-diameter pipes, from ore extraction through steelmaking to pipe manufacturing. This appeared possible through the multi-billion investments into technical upgrading made by NLMK and OMK. I am sure that our further cooperation will become an important step in the development of an entire industry, strengthening OMK's leadership in the global pipe market and making NLMK Group the largest supplier of steel products for the pipe sector,” said NLMK Group President Oleg Bagrin.

In 2012-2013, VSW produced 1,285 million tonnes of large-diameter pipes. These products were used for Russian and international pipeline projects including Gazprom's Bovanenkovo-Ukhta and Ukhta-Torzhok, Transneft's Zapolyarye-Purpe projects, and the construction of the third string of the Central Asia-China gas pipeline, etc.