Media Center

12.09.2006

TMK and Hydril Company LP Set Up Joint Venture

Russia’s leading pipe producer TMK and Hydril Company LP (United States), the world’s leading developer and producer of threaded premium connections for pipes, have created a joint company called TMK-Hydril CJSC. The charter capital of the new company will be divided equally between the two participants in the joint venture.

As part of the project, the companies plan to acquire, build and use equipment, technologies and infrastructure on the basis of the production site of Pipe Production Unit No. 1 (TPTs-1) of the Volzhsky Pipe Plant, a subsidiary of TMK. The joint venture will engage in the cutting of Hydril’s premium threaded connections on casing pipes used in oil and gas drilling and production (OCTG, Oil Country Tubular Goods). Casing pipe will be provided by TMK mills. It will be the first company in Russia and the CIS to provide oil & gas sector with tubular goods of such quality.

TMK-Hydril CJSC will produce the entire line of premium connections offered by Hydril. The planned production capacity of the joint venture will be up to 38,000 metric tons of OCTG pipes with threaded connections per year. It will meet the requirements of Russian and the CIS companies for premium OCTG products. The agreement between TMK and Hydril also stipulates the possibility of installing additional capacity. Production is scheduled to begin in 2007.

Premium threaded connections for OCTG pipes (casing, pump and compressor, and drilling) differ from American Petroleum Institute standard threading in their high level of gas tightness and reliability. Premium connections are used in drilling environments where extreme pressure, temperature, corrosion and mechanical stresses are encountered, as well as in environmentally sensitive drilling. These harsh drilling conditions are typical for deep-formation, deepwater and horizontal or extended reach wells.

The average growth rate of the consumption of such pipes is 10%, which is due to the increasing complexity of oil and gas extraction in the world. Currently 100% of the casing pipes used in offshore drilling, as well as more than 80% of casing pipes being used in gas wells, have Premium class threaded connections.

Alexander Rekin, Head of Drilling of NOVATEK OJSC:
“Every year our company increases the number of new wells launched for use by 20%. Most of these wells operate in complex geological conditions and aggressive environments. They are used reliably and efficiently thanks to pipes with highly hermetic Premium class threaded connections. I am convinced that pipes with this type of threaded connections will be used more and more in the coming years.”