Newcomer wins major Gazprom pipe contract, to market's surprise
MOSCOW (Reuters) - Russia's ZTZ said on Thursday it had won a contract to sell half a million tonnes of pipes to gas giant Gazprom next year for the construction of part of the Power of Siberia pipeline. Gazprom did not respond to a request for confirmation of the contract, which ZTZ said was worth over 42 billion roubles ($641.24 million)
MOSCOW (Reuters) - Russia's ZTZ said on Thursday it had won a contract to sell half a million tonnes of pipes to gas giant Gazprom next year for the construction of part of the Power of Siberia pipeline.
Gazprom did not respond to a request for confirmation of the contract, which ZTZ said was worth over 42 billion roubles ($641.24 million).
Gazprom is obliged to hold tenders for such contracts, but news that the contract had already gone to ZTZ, which only entered the market three years ago, came as a surprise to other producers, who frequently take part in such tenders.
Other pipe producers were not aware that the contract had been offered, two sources in the industry said.
Official documents show that Gazprom filed a notice on Russia's official procurement website on Nov. 19 to hold a tender to buy 500,000 tonnes of pipes, and that the tender closed within 26 hours.
It was the second time Gazprom had held a tender for this project. Its first attempt fell through in October after all major domestic pipemakers refused to take part, with sources in the sector saying Gazprom had set the price too low.
ZTZ is a relatively new company. It began producing pipes in December 2015, and its arrival on the scene has shaken up a market traditionally controlled by four producers - steelmakers OMK and Severstal, plus specialist pipemakers ChelPipe and TMK.
Sources told Reuters in February that Kremlin-controlled Gazprom was seeking discounts - put by the sources at 20 percent - in an attempt to limit its investment spending, which is due to peak in the next two years.
"It is specifically our appearance on the large diameter pipe market that has permitted a total transformation of the skewed pipe price for Gazprom," ZTZ Chief Executive Denis Safin said in a statement on Thursday.
"Prices rose between 2011 and 2016, but after we launched, prices for large diameter pipes have fallen by over 30 percent for the gas company (Gazprom)," Safin said.
ZTZ's total plant capacity is 500,000 tonnes of pipes a year.
($1 = 65.4980 roubles)
(Reporting by Polina Ivanova; additional reporting by Oksana Kobzeva; Editing by Polina Devitt and Susan Fenton)
This story has not been edited by Firstpost staff and is generated by auto-feed.
By Robin Emmott and John Irish | BRUSSELS/PARIS BRUSSELS/PARIS France and Germany will agree to a U.S. plan for NATO to take a bigger role in the fight against Islamic militants at a meeting with President Donald Trump on Thursday, but insist the move is purely symbolic, four senior European diplomats said.The decision to allow the North Atlantic Treaty Organization to join the coalition against Islamic State in Syria and Iraq follows weeks of pressure on the two allies, who are wary of NATO confronting Russia in Syria and of alienating Arab countries who see NATO as pushing a pro-Western agenda."NATO as an institution will join the coalition," said one senior diplomat involved in the discussions. "The question is whether this just a symbolic gesture to the United States
BEIJING Chinese President Xi Jinping on Wednesday called for greater efforts to make the country's navy a world class one, strong in operations on, below and above the surface, as it steps up its ability to project power far from its shores.China's navy has taken an increasingly prominent role in recent months, with a rising star admiral taking command, its first aircraft carrier sailing around self-ruled Taiwan and a new aircraft carrier launched last month.With President Donald Trump promising a US shipbuilding spree and unnerving Beijing with his unpredictable approach on hot button issues including Taiwan and the South and East China Seas, China is pushing to narrow the gap with the U.S. Navy.Inspecting navy headquarters, Xi said the navy should "aim for the top ranks in the world", the Defence Ministry said in a statement about his visit."Building a strong and modern navy is an important mark of a top ranking global military," the ministry paraphrased Xi as saying.