Metinvest and Interpipe to supply pipes for gas-transport modernization

Metinvest and Interpipe won a tender to supply state-owned oil company Naftogaz of Ukraine with pipes for the modernization of Ukraine’s gas transportation system, according to a report published yesterday by the Ministry of Economic Development and Trade. The total volume of the contracts is UAH 160 mln, which envisions 2.5 mln mt of pipes (UAH 67.8 mln) being provided by Metinvest Holding, and 4.5 mln mt (UAH 95.9 mln) being provided by Interpipe. Naftogaz plans to invest UAH 3.1 bln into the modernization of Ukraine’s gas transportation system in 2011. Concorde Capital: This announcement is in line with our expectations of Ukraine’s modernization plans, and positive for Metinvest-controlled Khartsyzsk Pipe (UX: HRTR UK), as it is the only producer of large-diameter pipes in Ukraine. We also note demand for Khartsyzsk Pipe’s products from Transneft, which helped the company boost its pipe output by 5x y-o-y to 155.7 ths mt in 1Q11.