Synergy

TMK IPSCO’s extensive customer base in North America provides demand for a wide range of pipes manufactured by the Company. The size range of products manufactured by the facilities that make up TMK’s American division complement those made by the Company’s Russian and Romanian plants, offering American customers a wider size range of seamless and welded pipes. Most of the Russian-manufactured pipes that enter the U.S. market come from the Volzhsky Pipe Plant and include casing, couplings, and line pipe. Supplies to the American division were also carried out from the PQF mills at TAGMET and the Sinarsky Pipe Plant. In order to optimize capacity utilization, TMK’s Russian division ships to the United States both finished products and pipes that require additional finishing and heat treatment on-site at TMK IPSCO facilities. In 2010, active shale development contributed to the growth of shipments of Russianmanufactured products to the North American market. Supplies from TMK-ARTROM in Romania to the U.S. market consist primarily of heavy wall mechanical pipe.

The size range of products manufactured by the facilities that make up TMK’s American division complement those made by the Company’s Russian and Romanian plants, offering American customers a wider size range of seamless and welded pipes

Development of the Premium business segment comes with considerable potential for greater synergy. Currently, the ULTRA family of connections is being used by Russian oil companies. In early 2011, TMK delivered casing with ULTRA SF Premium Connections to Gazprom Neft to develop the Urmanskoye field in the Tomsk Region. In 2010, ULTRA connections developed by TMK IPSCO were certified at Gazprom VNIIGAZ, the Russian research center for the gas industry, and recommended for use in Gazprom’s fields.

Demand for ULTRA connections by Russian companies is due to the fact that increasing the proportion of Western drilling technologies like flush-joint casing significantly lowers metal consumption in wells, which is an important advantage when drilling deep wells and developing offshore fields. A very pertinent development has also been the introduction of ULTRA technology at TMK’s Russian facilities, such as the Orsk Machine-Building Plant.

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