TMK to raise Russia's pipe output by 20 %

Apr 26, 2010 02:00 AM

TMK, Russia largest pipe maker, plans to increase output by at least 20 % this year on higher demand from US shale gas producers and is raising Russian prices to compensate for higher raw material costs.
Mr Vladimir Shmatovich deputy chief executive officer for strategy of TMK said, "The growth at our US unit will probably be higher due to the shale gas boom. Shale gas developments are an exciting opportunity for us as they demand more pipes of higher quality and price."

Production is rebounding at the Moscow based company TMK IPSCO operation in the US which it acquired in 2008 for $ 1.7 bn. The utilization of capacity at the unit will rise to 70 % to 80 % in 2010 after falling to less than 50 % in the past year.
IHS Cambridge Energy Research Associates said in a study in March gas locked in shale formations will account for 50 % of US supply by 2035 up from 20 %. Shale gas is produced by a technique known as hydraulic fracturing, in which millions of gallons of chemically treated water are forced into wells to break up rock and allow gas to flow.

Source / Bloomberg
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