MMK Signs Long-Term Contract for Gas Supplies from NOVATEK
Jul. 2, 2012
Magnitogorsk Iron and Steel Works (MMK) signed a long-term gas supply contract with OOO NOVATEK-Chelyabinsk, a fully owned subsidiary of OAO NOVATEK, to support the group’s operating performance and future development. Total deliveries under the contract, which runs for 10.5 years through 31 December 2022, will be 50 billion cu m of gas.
Under the contract, NOVATEK-Chelyabinsk will deliver 2.3 billion cu m of gas to MMK in 2012, with 4.5 billion cu m planned for 2013.
MMK Deputy General Director Vitaly Bakhmetyev said: “NOVATEK supplied its first 500 million cu m of gas to MMK back in 2003. The contract that we have signed today meets the interests of both sides, and will secure MMK Group's energy safety requirements. NOVATEK is a reliable partner, and we welcome the establishment of long-term bilateral relations between our companies.”
Mikhail Popov, first deputy president of the board of OAO NOVATEK, said: “By signing a 10-year contract with MMK today, we have set a new precedent for relations between gas suppliers and consumers so that companies can build and implement long-term production plans on a firm footing. Having stable relationships with our partners is a cornerstone of our marketing policy. NOVATEK’S resource base means that we can provide guaranteed gas supplies.”
MMK is one of the world's largest steel producers and a leading Russian metals company. The company's operations in Russia include a large steel producing complex encompassing the entire production chain, from preparation of iron ore to downstream processing of rolled steel. MMK produces a broad range of steel products with a predominant share of higher value added products. In 2011 the company produced 12.2 million tonnes of crude steel and 11.2 million tonnes of commercial steel products. MMK Group revenue in 2011 stood at USD 9.306 bn, with EBITDA of USD 1.336 bn.
OAO NOVATEK is Russia’s largest independent gas producer and the second-largest natural gas producer in Russia. Founded in 1994, the Company is engaged in the exploration, production, processing and marketing of natural gas and liquid hydrocarbons. The Company’s upstream activities are concentrated in the prolific Yamal-Nenets Autonomous Region, which is the world's largest natural gas producing area and accounts for approximately 84% of Russia's natural gas production and approximately 17% of the world’s gas production. NOVATEK is an open joint stock company established under the laws of the Russian Federation. The company’s shares are listed in Russia on MICEX-RTS Stock Exchange and the London Stock Exchange (LSE) under the ticker symbol “NVTK” and on the NASDAQ PORTAL System as Rule 144A GDR under the ticker symbol “NVATY”.