Gazprom, pipe makers adjust LDP price formula
MOSCOW. Feb 10 (Interfax) - Gazprom and its biggest pipe suppliers have adjusted their pricing formula for large-diameter pipes (LDP) in 2016-2018, the Industry and Trade Ministry said.
An agreement on the matter was signed with TMK , OMK , ChelPipe and ITZ and supplements the agreement on the LDP price formula signed in 2012.
Pipe makers and Gazprom switched to "manual pricing mode" last year owing to the unstable economic situation. They worked on improving the formula and a mechanism for calculating the market price level once per quarter. The work resulted in the signing of the document on February 9.
The revised formula will make it possible to set a fair price along the entire cost chain that takes into account the market situation and more realistically reflects the cost structure of the pipe makers.
For producers this will mean the ability to more clearly plan production and business operations. In other words, the agreement will facilitate creation of a stable foundation for their activity along the entire technological chain.
"Now, given the changes in the macroeconomic conditions and price fluctuations on the market, the revised version of the price formula for large diameter pipe will take into account the changing cost of the ore and materials, of producing steel sheet, of transportation and of LDP production, and also stipulates the ability to change prices depending on the pace," an OMK representative told Interfax.
"Application of objective and up-to-date market factors in determining the LDP price will enable pipe makers and gas producers to lower their mutual risks," a TMK spokesman quoted board chairman and chief owner Dmitry Pumpyansky as saying.
The meeting participants also reached agreement to begin developing a formula for pricing pipeline fittings, according to statements from the Pipe Producers Association and Gazprom.
