TMK, Gazprom sign LDP agreement

11 February 2016 (09:28)

UrBC, Yekaterinburg, February 11, 2016. Pipe Metallurgical Company/TMK and Gazprom signed an additional agreement relating to the price of large-diameter pipes the latter buys from the former, the company press service reports.

The paper was signed by TMK Chair of the Board Dmitri Pumpyanski and Gazprom Chair of the Board Alexei Miller.

The first such agreement was signed in 2012 and stated that the final price should be determined by raw metal price quotations, steel sheet and LDP price fluctuations, and the Russian industrial manufacturers’ price-change index. It was also stated that the agreement could be reconsidered in three years’ time.

The new price formula will be based on the cost of raw metallurgical materials, steel sheet production costs, steel sheet transportation costs, and LDP production costs. Additionally, the price can be adjusted in accordance with the inflation rate and national currency exchange rate fluctuations. It is to be reconsidered on a quarterly basis.

‘We are one of Gazprom’s key large-diameter pipe suppliers, so we are naturally interested in a stable and transparent business partnership. Relying on factual, objective market factors to determine our product’s price will reduce our mutual risks and support our mutually beneficial relations,’ Pumpyanski said.

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