TMK Announces 2009 First Half Production Results

The decrease in pipe shipments was mainly related to the weak market demand observed in the first and second quarters of the year. The Company estimates that the Russian pipe market declined by 34.8% in the first half of 2009 as compared to 1H08.
Despite the weak pipe market, the Company increased shipments of high-margin OCTG products by 3% and premium connection shipments grew 47% to reach 61 thousand tonnes, allowing TMK to strengthen its leading position on the Russian oil and gas pipe market. The Company had an estimated 71% seamless OCTG market share in Russia in the first half of the year.
In the second quarter, TMK increased pipe shipments by 7% as compared to the previous three-month period, mainly as a result of its new longitudinal welded large-diameter (LD) pipe capacity. TMK secured longitudinal welded LD supply agreements for Gazprom’s Bovanenkovo-Ukhta pipeline, Transneft’s Eastern Siberia–Pacific Ocean oil pipeline and projects in Central Asia.
The Company expects further growth in large-diameter pipe demand in the second half of the year with the implementation of the Sakhalin-Khabarovsk-Vladivostok and Baltic Pipeline System-2 pipeline projects. Demand growth is also expected in the CIS as state-owned oil and gas companies in Uzbekistan, Turkmenistan and Kazakhstan invest in the development of oil and gas fields and related infrastructure.
TMK expects to continue increasing shipments of LD pipe thanks to its recently launched longitudinal welded capacity which allows the Company to successfully participate in large-diameter supply tenders.