Khartsyzk Pipe gets EU export certification from Gaz de France

Metinvest announced yesterday that Khartsyzk Pipe (UX: HRTR UK) was certified by Gaz de France, a purchaser of pipes from the European Union. Khartsyzk is the only pipe producer in CIS to receive the certification. Last week Khartsyzk also signed a contract with Russian Transneft. According to Transneft’s Vice President, Khartsyzk will deliver pipes for the second stage of the East Sibirea – Pacific Ocean oil pipeline of total 2100 km. (630,000 mt). Andriy Gerus: Given Khartsyzk Pipe’s deliveries to Transneft through yearend and probably into next year and possible contracts from the EU, we expect Khartsyzk to increase its average monthly output in 4Q10 and 2011 to 40,000-50,000 mt of pipes (up 2.2-2.7x to August 2010). We recommend BUY (for more details see our report of June 2010).