PRESS: Oil companies ask PM to allow usage of old pipes

MOSCOW, Apr 9 (PRIME) -- Russian oil companies Rosneft, Lukoil, Gazprom Neft, Surgutneftegas and Tatneft have asked Prime Minister Dmitry Medvedev to allow them to sell used oil and gas pipes or use them for construction, business daily Kommersant reported on Tuesday, citing sources.

Oil companies used to sell used pipes as scrap metal or used up to 80% of the old pipelines for construction. The sold pipes sometimes ended in the hands of companies that repaired the pipes and resold them with fake certificates. The practice carried risks of spillage, and the Federal Service for Natural Resources Oversight ruled that the used pipes are waste in 2017 and ordered the companies to pay for their recycling.

The steel pipe oligopoly, TMK, United Metallurgical Company (OMK) and Chelyabinsk Pipe-Rolling Plant, or ChelPipe, are forced to raise production of OCTG pipes for oil companies because large pipeline projects that consume large diameter pipelines are close to completion and the market will fall dramatically, analyst of Vygon Consulting Sergei Klubkov said, adding that they are the interested side in the pipe conflict.

Oil companies can have to spend additional 180–190 billion rubles per year on pipelines if they have to purchase new ones, the analyst said.

(65.3498 rubles – U.S. $1)

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