Severstal Suspends Siberian Welded OCTG JV Construction
Russian steel maker Severstal has suspended the implementation of a joint project with leading pipe maker Tenaris to build an OCTG pipe plant in the
Russian steel maker Severstal has suspended the implementation of a joint project with leading pipe maker Tenaris to build an OCTG pipe plant in the Khanty Mansiysk Autonomous District in Surgut area in West Siberia in Russian Federation. Severstal CEO Mr Alexander Shevelev told reporters "As of today, the project is on hold. We have completed the first stage, which was related to obtaining a construction permit, earth works & preparatory work. We are ready in principle to continue this project, but due to the situation on the markets, we see that the demand for pipes is decreasing, prices have dropped significantly, we have decided to suspend this project.”
Tenaris & Severstal had announced formation of 49:51 joint venture on 5 Febuary 2019 to build welded pipe plant to produce OCTG products. The plant, which was estimated to require an investment of USD240 million planned to have an annual production capacity of 300,000 tonnes. 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.
The plant is in the heart of the West Siberian basin, which the US Geological Survey classifies as the largest petroleum basin in the world. In addition to mature oilfields that have been supplying Russia and Europe with energy for many decades, the region is also home to the Bazhenov shale, which has potential reserves ten times greater than those of the Bakken Formation in North Dakota.