OREANDA-NEWS. OJSC Magnitogorsk Iron and Steel Works ("MMK" or "the Company") (LSE: MMK) announces that is has signed an agreement with TMK to apply a formula when calculating the pricing of wide hot rolled plate shipped to TMK enterprises. The agreement was signed at METAL-EXPO 2014, an international industrial exhibition held in Moscow. The mutually beneficial agreement, which sets out the price formula applied to steel products supplied up to the end of 2015, was signed by MMK CEO Pavel Shilyaev and TMK CEO Alexander Shiryaev.

MMK is expected to ship wide hot rolled sheets to TMK's Volzhsky Pipe Plant, for the production of large diameter pipes (LDP) intended for Gazprom's major Russian gas pipeline projects, including Power of Siberia, South Stream, and Bovanenkovo-Ukhta. The agreement demonstrates MMK's commitment to supply metal products to pipe companies, producing large-diameter pipe for strategic cross-country pipelines. In addition, agreements with pipe producers will allow MMK's steel plate production facilities to run at guaranteed capacity, namely at Mill 5000. In turn, the key parameters of the price formula for MMK sheets were agreed in line with the LDP formula applied by TMK and Gazprom.

"Following the commissioning of our Mill 5000 in 2009, it was TMK that received the first batch of the newly manufactured products. We are fully aware of the significance and scale of the projects and tasks carried out by gas and pipe companies. In response, we have been adopting state-of-the-art steel rolling technologies in line with the most advanced global standards. Reassured by the tests completed to date, we can confidently state that MMK products meet the most stringent requirements for pipeline application in extreme depths, temperatures, and aggressive environments," said Pavel Shilyaev, MMK CEO.