Due to lack of the European certificate the United Metallurgic Company (UMC) is forced to buy steel in Europe to make pipes for the South Stream pipeline. Price of European rolled metal is four times higher, than a local one, the expert said.
The Austrian steel maker Voestalpone will deliver 120,000 tons of plate steel for the UMC, Austrian company said at the end of last week. Out of Austrian steel UMC will make big diameter pipes, which will be used to build the second branch of the South Stream gas pipeline, said representative of the Russian company. Voestalpine will start delivery of rolled metal in December 2014 and will finish in spring 2015. The Russian company will make pipes at the Vyksun metallurgic plant. The sides do not disclose the sum of the contract. The price is competitive, said UMC representative.
Voestalpine has been selecred as a supplier, because of a high quality of its products, its experience in manufacture of steel pipes and availability of certificate meeting the South Stream requirements, said UMC representative. UMC representative said that the supplier of the remaining volume will be selected in the near future.
In March 2014 South Stream Transport company, which has been building South Stream gas pipeline, concluded a contract with UMC to deliver about a third of the pipes for the second branch of the gas pipeline. Among the suppliers are Japanese consortium Marubeni-Itochu and Sumitomo (40% of total volume) and Severstal (25%), reported South Stream. Total sum of the contracts reached about 800 million Euro. UMC and Severstal must deliver 230,000 and 160,000 pipes, respectively.
* South Stream Transport has concluded contracts for delivery of 75,000 tons of 12 meter-long pipes for the first branch of the offshore section of the gas pipeline, the company reported in January 2014. The pipes have been supplied by German Europipe (50% of total volume), United Metallurgic Company (35%) and Severstal (15%). Total sum of the contracts is about 1 billion Euro. Shares of UMC and Severstal made 230,000 and 100,000 tones of pipes, respectively. The offshore section of the South Stream consists of four parallel branches 931 km long.
