Tenaris and Severstal to form joint venture to build a welded pipe plant in West Siberia
Moscow, February 5, 2019 –Tenaris S.A. (NYSE, Buenos Aires and Mexico: TS and MTA Italy: TEN) and PAO Severstal (MICEX-RTS: CHMF; LSE: SVST) announced today that they will create a joint venture to build a welded pipe plant to produce OCTG products in the Surgut area, West Siberia, Russian Federation. Severstal will have a 51% interest in the joint venture company, with Tenaris owning the remaining 49%. The commencement of the project is subject to regulatory approvals and other customary conditions.
The plant, which is estimated to require an investment of USD240 million and a two year construction period, is planned to have an annual production capacity of 300,000 tons. Through this joint venture, Tenaris and Severstal aim to serve the growing market for welded OCTG pipe products in Russia and neighbouring countries, combining Tenaris’s knowhow in OCTG pipe manufacturing and sales with Severstal’s expertise in producing high quality steel products.
Alexey Mordashov, Chairman of the Board of Directors of Severstal, commented: “Our strategic goal is to make Severstal the leader in the future steel industry. And the future belongs to those companies that can provide their clients with unique solutions based on excellent understanding of their needs. To offer the oil and gas market best-in-class OCTG products and a range of customized and innovative services we are happy to join forces with a global leader in the manufacturing and supply of high-quality welded and seamless steel pipes. The production will be located in close proximity to the main oil and gas companies which will ensure cost efficiency both for us and our customers’ operations”.
Paolo Rocca, Chairman and CEO of Tenaris, commented: “We are very pleased to form this partnership today with Severstal. By combining our respective strengths and our commitment to industrial excellence, we believe that we can support the Russian and CIS oil and gas industry with a world-class and very competitive alternative for high quality OCTG products and services. As in all our operations around the world, we seek to deliver solutions that help to make customer operations more efficient and cost-effective”.
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