Severstal announced that its pipe production unit, the Izhora Pipe Mill which specializes in the manufacture of large diameter pipes from strips produced by the Cherepovets Steel Mill, part of the Severstal Russian Steel Division, produced over 500,000 tonnes of large diameter pipes in 2011, primarily for use in major oil and gas projects in Russia. This represented an impressive 10% increase on 2010 production levels.

Mr Nikolai Skorokhvatov CEO of IPM said “2011 saw the plant operating at full capacity and despite a declining market for large-diameter pipes at the end of the year, the Izhora Pipe Mill continued to produce and ship tubular products to our key clients.”

The production increase in at IPM was in part due to the Company supplying major projects by Gazprom and Transneft, two of the Company key customers. IPM supplied the products for Transneft East Siberia-Pacific Ocean pipeline system in 2011.

In 2011 IPM products were delivered to Gazprom for use in the construction of the

1. Gryazovets-Vyborg trunk gas pipelines to ensure gas supplies to the Severny Potok gas pipelines and consumers in Russia northwest

2. The Ukhta-Torzhok and Bovanenkovo-Ukhta pipelines to transport gas from the Yamal Peninsula fields

3. The Sakhalin-Khabarovsk-Vladivostok pipelines to transport gas from Sakhalin Island to the Primorye and the Far East.

Last year Bovanenkovo-Ukhta was the major project for IPM in terms of volume of product shipments. Some 250,000 tons of large-diameter pipes, which accounted for nearly half of the Company total shipments were delivered there in 2011. A total of more than 600,000 tonnes of pipes have been delivered by IPM for the Bovanenkovo-Ukhta Project since 2007.