Gazprom, pipe makers prolong pipe pricing formula till 2019

MOSCOW, Feb 9 (PRIME) -- Russian gas giant Gazprom and the country’s leading pipe producers – TMK, United Metallurgical Company (OMK), Chelyabinsk Pipe Rolling Plant (ChelPipe), and Izhora Pipe Mill – signed an agreement to extend the pricing formula for large-diameter pipes until 2018, the Industry and Trade Ministry said in a statement Tuesday.

The agreement is an addition to a pricing accord signed by Gazprom and the companies in 2012. Until 2015, prices for large-diameter pipes were defined by an index method, but the companies switched to a manual price definition due to an unstable economic situation.

“In 2015, on the background of significant changes in economic circumstances, pipe producers and Gazprom were working on an improvement of the formula and a mechanism of calculations of the market price level once per quarter. As a result, the document on the pricing formula for large-diameter pipes was signed on February 9,” the ministry said.

The new edition of the formula allows companies to set a fair market price for pipes through all the chain of costs including market’s conditions. It will reflect real costs of pipe producers, the ministry added.

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