07 2010 №1 (01)

04 Global Growth Potential 10 Metallurgists from the Ural adopt TMK IPSCO’s experience «We are 12 Shale gas in the U.S.: working on both sides of a success story the Atlantic»

16 Pipes for the Caspian Sea 18 From Dusseldorf to

Synergistic effect Table of contents 16

Dear readers, partners and friends!

Here is the first issue of the YourTube magazine, and I am glad to unveil this new media project of TMK to you. The new magazine technology stems from the development of our company and other processes 12 Shale Gas: Myths and Reality that have predetermined the current position of TMK. Continuous perfection and growth allowed us to globalize our business and Partners become one of the leading pipe producers in the world. 16 Pipes for the Caspian Sea Look at the map inserted into the issue: it shows TMK’s On cooperation between TMK and LUKOIL production facilities located on the two biggest continents of the globe. Geographical and language differences are no obstacle to Expo our cooperation. We pool our efforts on both sides of the Atlantic 18 Düsseldorf Rendezvous to produce the best pipes in the world. We speak the same TMK’s presentation becomes one of the key events international language with each other and our partners – these of Wire&Tube 2010 are Your Tubes – tubes that make us proud and the ones that you, our customers, need. 18 22 TMK Debuts at Leading Industry Event Launching a new magazine, we strived to achieve the same TMK debuts at Offshore Technology Conference level of mutual understanding. Day by day, the number of people connected with TMK is growing. Some find here an interesting 2 News sport and promising job, while others a reliable long-term partner. We 24 The Crystal Ball Stayed in the US always have something to share and to discuss. We would like Subject TMK vs TMK IPSO basketball match to establish a dialogue with our readers. We invite everyone 4 Synergy of Technology and Intelligence to share ideas and news with both TMK employees in various Alexander Shiryaev, CEO TMK, – on TMK’s global countries and those who are only discovering the global reach development strategy of our company. We also propose to our partners to continue cooperation at the pages of this magazine. The magazine is Interview published in Russian, English and Romanian. 6 Piotr Galitzine: «We are working on both sides Thus, we will certainly achieve synergy in the field of information of the Atlantic» exchange, as we have done in our business. The first issue is Chairman of TMK IPSCO Piotr Galitzine – on the merger dedicated to synergy in TMK. We are sure that this issue dealing with TMK and opportunities it gives to both companies with effective relations within our company and its cooperation potential will unite us even closer. I hope you will be able to find quality management new interesting relevant information in this and following issues 10 Enhancements at Seversky Tube Works of the magazine. Improve Billet Quality I am certain that the broad readership of TMK’s employees and Engineers of ТМК IPSCO share their experience with their 10 partners will appreciate the launch of the YourTube magazine. Russian counterparts Let us communicate without borders within the framework of a global company. Project managers: Registered by the Federal Service for the Supervision Publisher: Media-Service LLP Svetlana Bazylchik, TMK in the Sphere of Communications, Information 29-3, Nikoloyamskaya Str., Best regards, [email protected] Technologies and Mass Communications 109004 , Russia #1 (01), July 2010 License PI #FS77-40128 dated June 11, 2010 Tel: +7 (495) 988 1806 Natalia Svyatoslavskaya, Media-Service Any use of materials is prohibited without prior consent Dmitry Pumpyanskiy Incorporator: [email protected] of the editorial board Chief editor: Mikhail Semenov Chairman of the Board ОАО TMK Tube Pipe Metallurgical Design director: Maxim Gelik Company – TMK 40-2a, Pokrovka Str., Moscow 105062, Russia Editorial council of the issue: Correspondent: John Mandel Tel: +7 (495) 775 7600 Piotr Galitzine, TMK IPSCO Chairman Designer: Alexandra Marochkova Fax: +7 (495) 775 7601 Alexander Belomestnov, Chief Technical Officer Color corrector: Mikhail Sayanov www.tmk-group.com of TMK IPSCO Proofreading and translation: Mashburo 16 Alexander Shiryaev, CEO of OAO «TMK» Printed by Print-Market LLP Vladimir Smatovich, Senior Vice-President for Strategy Order # 289-07 and Business Development of OAO «TMK» Circulation 500

01 YOURTUBE news

>>> Baytown Plant’s Premium Upset >>> Annual report approved Shop Is Now Operating The annual shareholders’ general meeting of OAO TMK A new premium upset shop at TMK IPSCO’s plant in was held June 22nd in Moscow. The meeting approved the Baytown, Texas, is up and running, producing a variety annual report and financial statements, including profit of premium connections products for the oil and natural and loss accounting fiscal year 2009 and elected the Board gas drilling industry. The Baytown addition complements of Directors and Audit Committee. The auditor is from Ernst two existing premium upsetters at TMK IPSCO’s facility & Young, the approved company for OAO TMK. Moreover, in Ambridge, Pennsylvania, enabling the company to the shareholders voted for not paying annual dividends significantly expand its manufacturing capabilities and on the results of TMK in 2009. The following members industry leadership position. were elected to the Board of Directors: Andrew Kaplunov, The key to the upset facility is a 5” double-toggle forging Joseph Marous, Sergey Papin, Thomas Pickering, Dmitry machine that produces premium upsets. These premium Pumpyanskiy, Jeffrey Townsend, Igor Khmelevskii, Alexander upsets vary from 2-3/8” to 3-1/2” in diameter and are Shiryaev, Alexander Shokhin, Mukhadin Eskindarov. available in several different grades, making them ideal for a variety of horizontal and deeper wells that are gaining popularity in the unconventional shale fields, as well as offshore drilling applications. Representatives of TMK at the negotiations in Calgary The new upset shop is part of a major tube mill capital expansion project at Baytown that was begun several >>> TMK IPSCO OPENS CANADIAN OFFICE >>> State-of-the-Art Brookfield Plant Opens years ago to increase the quantity of high-performance TMK IPSCO has announced it will soon open a Sales Office in Calgary, Alberta TMK IPSCO’s new state-of-the-art manufacturing plant in Brookfield, products made at the facility. Canada. The new office will serve as TMK IPSCO’s Canadian headquarters Ohio, opened to great fanfare in early May. State and local officials Construction and installation of equipment at the upset for sales and will support TMK IPSCO’s commitment to better service its joined top executives of TMK IPSCO at a ribbon-cutting ceremony shop took about one year to complete. The first TMK IPSCO cross border customers with value-added sophisticated products for both celebrating the facility’s start-up. products were produced in Baytown during June. conventional and unconventional hydrocarbon exploration and development. The plant site was selected after a comprehensive search for a location The Sales Office, which is scheduled to open on August 1, 2010, will be in the Marcellus Shale gas play, an ancient and largely untapped natural managed by Dimitry Butorin, Director of Sales – Canada. Mr. Butorin has Evelyn Majoris, Safety Manager for both the Koppel and Ambridge facilities gas formation under eastern Ohio and much of Pennsylvania, West Appointments extensive experience with TMK, both in the US and Russia. Virginia and New York. >>> Piotr Galitzine, TMK IPSCO’s Chairman, commented, “The new Sales Office in >>> Focus on Employees Drives Safety This new facility makes a variety of ULTRA™ Premium Connections Calgary is an important step in TMK’s continuing growth as a global company Improvement at Three Plants products that support TMK IPSCO’s growing market share in the Paul Fullerton is appointed and world class pipe manufacturer. This new Calgary Office will further Three TMK IPSCO facilities continue to improve their Marcellus Shale gas plays. It has an annual manufacturing capacity of to the newly created position enhance our ability to support our customers in the development of the oil safety performance, thanks to a focus on listening to up to 100,000 tons of threaded pipe. The plant currently employs 30 of Vice President of TMK IPSCO, sands in Western Canada”. employees and involving them in the improvement persons, and plans are to employ up to 120 persons once the Marcellus TMK Premium. Mr. Fullerton Vicki Avril, TMK IPSCO’s President and CEO, added, “As a company, we go process. The plants are located in Blytheville, Arkansas, as Shale reaches its full production potential. joined IPSCO in 2005. As Vice where our customers need us. This new Canadian Sales Office is just another well as Koppel and Ambridge, Pennsylvania. TMK IPSCO Chairman Piotr Galitzine and President and CEO Vicki Avril, President he will be responsible example of TMK IPSCO positioning our business close to our customers. We TMK IPSCO plant management teams at each location along with Ohio Governor Ted Strickland, Congressman Tim Ryan, Ohio for developing, manufacturing are committed to the Canadian market and we are excited to bring the IPSCO have been actively involved in the safety program and Department of Development Director Lisa Patt-McDaniel and Max and sales promotion of TMK name back to Canada, where it began”. have taken a proactive approach to delivering safety Blachman, Senator Sherrod Brown’s representative for northeast Ohio, IPSCO ULTRATM premium connections, TMK Premium messages. Various projects aimed at enhancing plant participated in the ceremony and toured the plant. connections and related services to support on and physical conditions have been completed at the three “Development of the Marcellus Shale is in its early stages and will off-shore drilling customers globally. facilities, and employees are participating more actively continue to grow,” said Galitzine. “Unconventional gas, especially in >>> International Trade Commission Issues Final in safety committees and risk assessments. There is shales such as the giant Marcellus, holds the promise of energy security Joseph Marous recently was Ruling on Chinese OCTG also more emphasis on completing proper incident of the U.S. – our pipe and connections will help unlock that. The appointed President of the The U.S. International Trade Commission has ruled that imports of certain investigations and corrective action items. Brookfield plant will help develop the Marcellus Shale into one of the European division of TMK. He OCTG (oil country tubular goods) products from China have materially injured The Blytheville location has received TMK IPSCO’s biggest natural gas sources in the world.” was elected Chairman of the domestic industry or threatened it with material injury. As a result, the U.S. annual “Best in Class Safety Award” for the past four Board of TMK GmbH, as Commerce Department has issued final anti-dumping duties of between out of five years. The award is presented to the location well as Chairman of the Board 30 and 99 percent on imports of these products from China. with the best combined performance in external audit >>> TMK’s Securities Come to the U.S. Market of Directors of the following The case was filed in April 2009 by the United Steelworkers Union and seven results, safety business plan accomplishments and TMK will be traded in American Depositary Receipts, commonly referred to business divisions: SC TMK- U.S. OCTG producers, including TMK IPSCO. It is the largest trade case against incident rate metrics. The Koppel and Ambridge facilities as ADRs, on the over-the-counter (OTC) market in the USA. Each TMK ADR, ARTROM SA, SC TMK-Resita SA and TMK Italia SRL. Chinese shipments, which were valued at more than $2.6 billion in 2008 and have seen incident rate reductions of approximately 25 representing four ordinary shares of the company, will be traded on the He is also an independent Director of the Board of about $1 billion in 2009. percent and 33 percent, respectively, compared to the electronic platform OTCQX in the highest tier of OTC trading, International Directors of OAO TMK. The Commerce Department had previously determined that Chinese OCTG same period last year. Recently, the Koppel facility has Premier OTC, under the ticker TMKXY. The Bank of New York Mellon Mr. Marous’s professional experience includes Head was sold in the U.S. market at less than fair value, with Chinese producers instituted an aggressive strategic safety plan to renew Corporation will act as the Depositary for the ADR program for TMK. of ThyssenKrupp AG in Russia, a member of the receiving illegal subsides of 10 to 16 percent of their product value. Since the the effort of improving communication with employees Entering the U.S. OTC market was a continuation of the efforts of TMK, aimed Board of Directors of OOO ThyssenKrupp Elevator beginning of 2010, Chinese OCTG imports have dropped dramatically. and create a positive, proactive approach to raising at improving the transparency of the company and liquidity in its securities. and Chairman of the Automotive Components Two other cases against imports of Chinese seamless standard line pressure safety awareness. The Ambridge facility is also piloting Currently Global Depository Receipts (GDR) of TMK are traded on the London Manufacturers Association of European Businesses pipe and drill pipe are also progressing. The ITC and U.S. Commerce a program to integrate safety into all job tasks through Stock Exchange (ticker TMKS), while shares of TMK – in the Russian Trading in Russia. Department will issue final countervailing duty and anti-dumping duty ongoing job performance evaluations that measure the System and Moscow Interbank Currency Exchange (ticker TRMKG). determinations later this year. progress toward safety goals.

02 YOURTUBE 03 YOURTUBE subject

seemed logical to us as we have worked closely trend is the introduction to our Russian enterprises of together over the years and shared a common culture technology from the ULTRA™ connections. Currently promoting interaction and development. We are quite TMK Premium Service is working to improve the confident that the association of European assets in model number of Premium connections at our Russian Synergy of Technology TMK is a good platform for effective interaction and businesses through the development of production for enhanced shareholder value. the connections and has now entered into licensing It is also important that we successfully create a agreements. and Intelligence productive environment for continuous improvement of all our processes in the division, furthering its How do you assess the prospects of premium business for development. This ensures closer interaction with other TMK and market these products? In 2009, TMK merged its European holdings only a year after entering the U.S. by parts of TMK, exchanging technical and commercial As part of the planned consolidation of our regional acquiring the TMK IPSCO manufacturing locations. As a result, TMK has successfully knowledge and achieving a productive cooperation Continued offices producing exclusive pipe fittings manufactured for completed a geographical presence of its business in three main market sectors: Russia, between departments. strengthening specific fields and maintenance work on oil and gas fields America, and Europe, thereby establishing a new path as an international company. of cooperative in Russia and the U.S., we are able to realize the synergy efforts within CEO Alexander Shiryaev tells how to develop a strong global business. What benefits were realized with TMK’s acquisition of transferred technology and intellectual property. the company, of U.S. assets? establishing We believe that the experience of TMK IPSCO in the The Canadian company IPSCO had over 50 years of effective manufacturing of pipes, including ULTRA™ connections, experience in pipe production and held a unique position utilization of for construction and operation of oil and gas wells Alexander, what has changed for TMK at the cooperative efforts within the company, establishing in the industry in North America with well-known brands, all its parts, for unconventional drilling, has a special value to us. international level? effective utilization of all its parts, and powerful high customer loyalty and an experienced management and powerful Our Russian oil and gas clients are interested in this TMK, which has long been established as the transcontinental synergistic potential will allow us team. Because of this, IPSCO was our ideal target for transcontinental high-tech product line. We associate the development leader in the Russian pipe market, received continued growth of our competitive advantages. acquisition fulfilling the strategic objectives. synergistic potential of the production of premium products with potential a real opportunity to realize our ambitious TMK was geared to fulfill the needs of the oil and will allow the development of complex fields like Shtokman, plans to become a global leader. The What gives TMK, as a public company, whose shares are gas industry and IPSCO specialized in the production us continued Vankor, and Sakhalin and offshore projects in the company now includes 23 manufacturing traded on the world's trading floors, its new status? of welded and seamless oil and gas pipes, including growth of our Caspian Sea. sites collectively located in Russia, USA, «Global reach» improves the positioning of TMK in hermetic threaded connections of the “Premium” class competitive Currently ULTRA™ is the most widely used premium Romania, and . We also have the world market and gives new impetus to the under the brand name ULTRA™. advantages connection for shale deposits in the United States. The an extensive network of offices and trading implementation of its strategy. A balanced presence TMK IPSCO was formed on the basis of the acquired intensive development of shale gas production in North companies with Trading House “TMK” providing across regions, in terms of production sites and sales, company and has a strong presence in the U.S. and a America contributes to the growing demand for high-tech a greater presence of TMK sales worldwide in leads to an increase in customer base, reduced risks very broad customer base. We gained a foothold in the products and allows TMK to increase shipment volumes. more than 65 countries. We are seeing positive inherent in emerging markets, and benefits from the main global pipe market using direct involvement in the By the end of 2009, TMK ULTRA™ reached a market share synergy as a result of combining business units, mutual use of best practices and experiences. All of these American segment of OCTG, giving access to new types of of 30 percent for premium connections used for oil-shale management practices, intellectual experience, are qualities and capabilities of a global company and products for the oil and gas industry. deposits in the U.S. This was a prerequisite for further technology and technological capabilities. add to our competitive advantages, which are valued by capital investments in capacity expansion. The site in TMK today has the world’s largest production investors and partners. What is the synergistic effect of combining the technical Brookfield, Ohio was built and launched a new line with capacity for the entire spectrum of steel pipes. and technological capabilities of the Russian, European annual capacity of 100 thousand tons. About half of these facilities are focused What did the consolidation of the European assets and American businesses in TMK? In Russia, TMK increased its market share of premium on the production of premium-pipes of TMK give to each enterprise separately and the company We gained a significant increase in operational connections up to 70 percent. OCTG – threaded pipes for oil and gas as a whole? capabilities in production and product lines under the production. The strategic direction of The Romanian factories, TMK-Artrom and TMK-Resita, TMK brand. We are able to complement the line of What is the anticipated result for TMK in 2010? TMK is to ensure the needs of the oil after their acquisition by the company, received a large products for our U.S. manufacturing plants with a range We expect to continue a positive trend in the markets and gas industry globally as it sets capital investment to upgrade their production facilities of products from our Russian and Romanian companies, and the growth in drilling and mining in the hydrocarbon a new standard of success with this and technologies. Now they form a single production thus improving our offerings in the North American fields both in Russia and abroad (including the Americas) pursuit. facility and meet all modern specifications of steel and market with the expansion and balanced range of welded supports our optimistic forecast about the end of year Our company is firmly entrenched pipe production. and seamless oil tubular products. results. This optimistic view is further supported by first in the elite club of producers of The primary market for TMK-Artrom and TMK-Resita is Additionally because of a strong customer base in the U.S. half results showing an increase of 55 percent in the seamless OCTG. In 2009, we held Europe. Of their total production, they supply 15 percent gained from the acquisition of IPSCO, we will increase volume of our supply of products compared to the same 13 percent of the world and 69 to Romania, 50 percent to Europe and the balance sales of pipes for industrial use that are made by our period last year. percent of the Russian market to the U.S. The association of Romanian plants with Russian and Romanian divisions. An example of this is Against the background of current positive trends in our with this highly profitable trading companies in Europe helps TMK increase the TMK IPSCO is currently missing a number of popular key markets and trends in energy prices, we expect a full product. effectiveness of sales of our products in the market. products in this sector including seamless pipes with a recovery in demand for pipe products in 2010. Given this TMK is also constantly Consolidation of TMK’s European assets into one entity diameter of more than 5 ½ inches and on the smaller forecast, we strive for the year not only to return to pre- striving to increase sales of allows us to control processes throughout the value chain. seamless pipe sizes that customer demand significantly crisis numbers of 2008 in volume of shipment of products premium products and their It facilitates planning, coordination and control, thus exceeds its production capability. but to surpass those numbers. Now our Russian factories manufacturing capabilities. helping to quickly respond to market changes – which is The most important result expected from consolidation are receiving orders at the pre-crisis level. Companies in These products are in high very important in today’s world. is effective business growth with Premium products. We the U.S. are at 90 percent and Romania 70 percent. demand because of today’s We set goals and guiding principles for all aspects are planning for increased sales of ULTRA™ pipes with The company plans continued use of its competitive extreme conditions of of our work so that the decision-making process is connections in markets outside of the U.S. – including advantages to increase production and to improve hydrocarbon production. accelerated. Combining our human resources makes Russia and CIS countries – by producing a sufficient the structure of the product portfolio, striving toward Continued effective use of intellectual ability and adjustment supply of seamless pipes at the TMK ULTRA™ sites with a greater market share of high-tech and premium strengthening of of strategy. The emergence of the European Division subsequent re-export of premium products. A second products.

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Piotr Galitzine: «We are working on both sides of the Atlantic»

Chairman of TMK IPSCO Piotr Galitzine tells about how the integration of OAO TMK and TMK IPSCO is progressing, the benefits both entities have received and some of the organization’s upcoming business challenges and opportunities.

What benefits has TMK IPSCO received as a result We have learned to work and communicate together of its acquisition by OAO TMK? much more effectively over the past two years. Our It was expected from the very beginning that a colleagues in Russia are improving their English, technology transfer from Russia to the United States and we are all communicating more effectively with would occur. Over the past decade, OAO TMK has reduced need for interpreters or translators. As a result, continually invested in and upgraded its plants and both the quality and speed of our communication have equipment in Russia. We expected that increased improved tremendously. investment to give us excellent results and are seeing the fruits of these efforts now pay benefits as that What are the future plans and opportunities for technology is transferred to the U.S. pooling these efforts together? For example, we have had several opportunities to Clearly, the first place we should pool our trans- work closely with experts in pipe rolling and metallurgy Atlantic efforts is on the premium connections product through our partnership with “RosNITI”, the Russian line. Currently, Europe doesn’t use a lot of premium Research Institute of the Tube and Pipe Industries. This connections, but they are becoming more popular in private company engages in scientific and technological Russia. We expect future projects to be developed development of the Russian pipe and tube industry jointly based on market opportunities and customer by conducting design engineering, analytical study, feedback. research, development and technological work We are working on both sides of the Atlantic to What we didn’t anticipate – and what has turned out develop a second generation of premium products. In to be a bonus – is the opportunity to see up close the addition, we are beginning to cooperate with a number extremely lean production and management practices of of universities in creating the designs and metallurgy TMK IPSCO. The Group is not only studying TMK IPSCO’s needed for third-generation products. key performance indicators, but also benchmarking the rest of the company’s practices against them. Describe the characteristics of the U.S. pipe market and the changes that have occurred as a What are some specific examples of trans-Atlantic result of the latest downturn? cooperation from the past two years? The U.S. pipe market is unique because distributors Some of the work has involved design changes in play a key role in it and the market is very nimble – our Ambridge, Pennsylvania, plant that enhance almost like a spot market. We have 700 potential wall thickness control, ovality and eccentricity in clients in the U.S. In Russia, there are 35 potential oil seamless pipes. Work is also being done at the Koppel, and gas company clients. We have signed strategic Pennsylvania, steel mill to enhance metallurgical partnerships with many of these Russian firms, with properties. In addition, we are beefing up plant and deliveries spelled out over one-, three- and even five- equipment throughout our manufacturing system to year terms. In the U.S., there is some “program buying” enhance productivity, efficiency and quality. by end users, but no long-term contracts to speak of. Probably one of the biggest changes in the U.S. How would you characterize the current market that has occurred due to the latest economic interaction between TMK IPSCO and OAO TMK in downturn is the growing importance of unconventional terms of deciding which projects are carried out? methods to extract natural gas (oil sands, shales, “tight

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Now that OAO TMK truly is a global company due to the acquisition of TMK IPSCO, we have minimized our risks because we are better diversified geographically. When the Russian market softened in the second half of 2008, the North American market was doing exceptionally well. In 2009, the roles were reversed

gas,” coalbed methane), plus the fact that electricity is further proof of the volatile nature of the American generators who have been predominately coal market, which brings up another very important users for years are initiating conversations with gas point. Now that OAO TMK truly is a global company companies about 10-, 20- and even 30-year contracts. due to the acquisition of TMK IPSCO, we have If these long-term contracts become reality, they could minimized our risks because we are better diversified definitely transition to our industry in the next few geographically. When the Russian market softened in years. The benefit for companies such as TMK IPSCO the second half of 2008, the North American market is that if you can secure long-term contracts, you was doing exceptionally well. In 2009, the roles were can plan your production longer into the future and reversed. The net effect on TMK overall was that our there will be fewer changeovers, better utilization total 2009 shipments were only 14 percent lower of equipment, greater efficiencies and more accurate than in 2008. That was much better performance forecasting of capital investment needs. than either company would have had if we had not joined together, and much better than many of our How would you describe the current market competitors. situation? The current economic climate certainly inspires What results did TMK IPSCO achieve in 2009 confidence for the future. One year ago, TMK IPSCO’s and what are the current production results plants were running at 15 percent capacity utilization. for 2010? Today, we are over 80 percent capacity utilization. This As I stated before, 2009 was a difficult year for TMK IPSCO. We shipped just over 400,000 tons of product. This year we are actively enlarging production and plan to increase volume of the deliveries at least twice.

Will the modernization of TMK IPSCO’s Management team of TMK IPSCO production facilities continue? Yes, our plant modernization program will continue. The oil industry has known about shale gas for 60 with higher collapse properties, higher tensile yield In 2009, we completed a pre-existing $200 million years, but it hasn’t been economically viable to strengths, greater corrosion resistance and better capital investment plan to increase our U.S. finishing produce from these formations, as they are typically hermetic premium connections. capacity. Our new goal is to more closely match our only 50 to 100 meters thick in their vertical dimension. pipe production capabilities with our pipe finishing The advent of horizontal drilling has changed What are the major opportunities and challenges capacities at each production location. The 2009 the picture by making drilling for shale gas more for TMK IPSCO in the next few years? market downturn enabled us to experiment with economical. I see four major opportunities for TMK IPSCO. Firstly, improving our quality and yield, and we will apply the All three forms of unconventional gas accounted for 47 expansion into the market of Canada. Secondly, knowledge we obtained going forward. percent of the total U.S. production in 2007, with shale expansion into Central and Latin America. Thirdly, We will also continue to foster innovation and enhance gas alone accounting for 12 percent. expansion into new market segments such as offshore product performance by making appropriate production Unconventional gas is found all over the world, applications. And finally, building on the success of the changes. For example, we increased our billet size from but North America has the lion’s share. Geologists ULTRA™ Premium Connections product family to drive 5-1/2” to 6-1/2” in our Koppel plant, which enabled us estimate that there is two to three times as much pipe sales worldwide to more quickly and economically produce the 5-1/2” unconventional gas as conventional gas in Europe. TMK IPSCO’s major challenges are clearly to combat casing size at our Ambridge plant that is ideal for In the U.S., the estimate is five times as much our competitors’ plans for expanding the production customers drilling in the Marcellus Shale. unconventional gas as conventional gas in the ground. of seamless pipe (V&M and Tenaris), as well as welded This is a very favorable development for the U.S. in the pipe (Boomerang). We are positioning TMK IPSCO What are the prospects for shale gas production fight against greenhouse gases, as natural gas has half as the American division of OAO TMK that provides in the U.S.? the carbon dioxide footprint of coal and two-thirds customers in the Americas with innovative quality The correct description for what is transpiring in the that of oil. products and solutions. We are also positioning U.S. is unconventional gas production. There are three ourselves to take advantage of the tremendous types of unconventional gas: tight gas, shale gas and Which challenges in manufacturing pipe products opportunities and meet the challenges that lie ahead. coalbed methane. All three forms require stimulation are of high priority given the market needs? of geologic formulations with repeated hydraulic In the U.S., every business constantly focuses on Would you like to emphasize anything else? fracturing. Shale gas and coalbed methane require making products better, faster, simpler and at TMK Group is the youngest and fastest-growing pipe horizontal drilling because they are vertically thin and lower cost. The gas and oil extraction business is company in the world. Great things are happening horizontally long formations. no exception. Our customers are demanding pipe here! Stay tuned!

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ike Brown, process the Ambridge, Pennsylvania, facility; Enhancements engineering manager at • process control analysis has MTMK IPSCO, and his team resulted in improved production provided Six Sigma instruction and ramp-up of the new heat treat at Seversky Tube Works support to a group led by Alexander facility in Baytown, Texas; Murzin, chief of the Seversky • reduction of maintenance metallurgical laboratory, which downtime has increased heat treat Improve Billet Quality____ John Mandel, TMK IPSCO focused on making the quality throughput at the Tulsa, Oklahoma, of the steel billets produced at facility. Mike Brown reading the lessons for specialists of Seversky Plant Seversky more stable. These billets TMK IPSCO’s continuous TMK’s Quality Group created a taskforce staffed by employees from both TMK IPSCO and TMK‘s range in size from 150 to 156 improvement program is based on completed action items defined by Seversky Tube Works manufacturing complex in Polevskoy (Sverdlovsk region, Russia) to complete millimeters. To rectify this problem, the Six Sigma Lean methodology, the FMEA focusing on equipment a major project to improve the quality of the steel billets at the Seversky facility. The project the TMK and TMK IPSCO teams which was developed to reduce set-up and alignment, mold insert began in March and is now in the latter stages of completion. were asked to identify the cause defects and rework in a given optimization and mold metal level of the cracks and implement an process. Presently, there are control”. effective solution that would reduce nine process engineers each After the TMK IPSCO team the defect rate. progressing three to four projects concluded its instruction and The three-person team from TMK in all operational areas of the preliminary work, the Seversky team IPSCO worked closely in partnership organization. These projects are continued to successfully apply with its TMK colleagues. The TMK chosen by TMK IPSCO’s leadership its Six Sigma training and tools. In IPSCO group included Brown, a Six team and plant managers to address the first month after many of the Sigma master black belt; Ray Miller, the areas of greatest need. changes were implemented, the director of technical services for The company also utilizes other Seversky Tube Works exceeded its manufacturing seamless products methods and efficiency tools to goal for reducing billet defects. at the Koppel, Pennyslvania, facility; enhance processes and results at its These improvements will enhance and Anna Overdorf, senior process plants, including: tube quality by minimizing the risk engineer at Koppel. • lean/Kaizen: A rapid change of cracks and seams in the pipe, as The Seversky Tube Works project methodology to reduce waste and well as reducing waste. was very complex because inefficiency in a specific process; “The TMK IPSCO team’s experiences there were so many possible • 6S: An economical methodology at the Seversky facility were manufacturing process variables for improving safety and workplace enjoyable on many levels,” that could have caused the billets organization. said Brown. “Not only were we to crack. The project’s focal point According to Brown, his team able to work together to solve was determining which ones were utilized the knowledge it gained the manufacturing challenges, responsible for causing the billet from the Koppel projects and but our TMK colleagues made defects and then controlling them. applied it at Seversky. Because the us feel very welcome during the Brown and his team were chosen Six Sigma methodology is similar entire trip. They have a strong desire to work on the Seversky project for most types of modernization to improve the facility and were because they have extensive and enhancement projects, it very open to our discussions about experience in identifying worked extremely well at Seversky the problems and the methodology and implementing process in determining specific areas for we recommended. We also found improvements at numerous TMK improvement. our colleagues to be extremely IPSCO plants. “We shared key aspects of the knowledgeable. We look forward Recent projects that have been Six Sigma methodology and to future opportunities to share completed at these facilities and process knowledge with our TMK our knowledge and experience to their results include: colleagues”, said Brown. “It was improve company processes.” • reducing the superheat their first exposure to Six Sigma, The Seversky project is only temperature has increased tonnage and it turned out very well for the initial stage of OAO TMK’s at the Koppel facility; everyone involved. Using a failure improvement program in • changing the scrap mix has mode and effects tool (FMEA), the cooperation with TMK IPSCO’s reduced raw material costs at teams were able to jointly pinpoint engineers. In the future the Koppel; several potential changes in the experience and knowledge acquired • implementation of improved SPC billet-forming process that would during the project will be applied (statistical process controls) has increase the percentage of high- at other facilities of TMK inside reduced heavy/light wall defects in quality billets. The Seversky team Russia.

10 YOURTUBE 11 YOURTUBE argument

Shale Gas: 1.36 trillion cubic meters – were It has been reported that the US accusations, no one disputes the found in Poland. If this data is Department of Energy found that fact that shale gas is regarded as confi rmed, the proven gas reserves the fi gures for the production of one of the key additional resources Myths and Reality in Europe will increase automatically natural gas in the country were of energy. The question that needs by 47%. Plenty of energy companies overstated and that companies and to be examined is the pace of this from the West are willing to countries created the excitement development. The subject of shale gas production has not left the headlines of newspapers in recent participate in the development and around shale gas to increase market Within this query, both sides have years and has been debated at international conferences and legislative bodies all exploration of the Polish oil shale value. This has had an aff ect on become realists agreeing that over the world. Quite often people approach the subject with diametrically opposing with news reporting participation production as the technology is the production of gas from shale views, with optimists predicting that the energy source could be revolutionary due to from ConocoPhillips, Exxon Mobil, quite specifi c for unconventional is more labor intensive and time the rapid expansion of production and more skeptical people opining that it is nothing Marathon and Talisman Energy. plays and massive investments – consuming than conventional gas. more than hype driven by a public relations machine. YourTube tried to understand the much larger than conventional Companies have been trying to get arguments of both sides. Skeptics plays – are needed to maintain gas from shale in the US over the This camp is primarily made results. Many smaller exploration last 70 years. Only recently have up of companies producing gas and production companies do not technological advances allowed a in the conventional way, some take into account this fi nancial signifi cant increase of production. The US example serves as an environmentalists and some burden and are now facing many Take into account that Europe inspiration to Europeans and the industry analysts. The analysts say diffi culties stemming from this. is only at the beginning of the Chinese who expect a breakthrough that gas from shales is only drilled ’s Alexei Miller believes journey. of shale gas production very soon. in the US and Canada. The share that the production of shale gas in Russia was generally caught by Now China has signed an agreement for the US last year resulted in the US is an urgent task because the surprise with unconventional with the US to cooperate in 67 billion cubic meters and was country’s conventional hydrocarbon production of shale gas as their production of unconventional gas approximately 11.6% of total gas reserves could be exhausted scientists previously regarded this and Polish Foreign Minister Radek production in the country. The very soon. He also pointed to the rock as unpromising Major scientifi c Sikorski holds talks in Houston result for Canada is more modest technological aspects of production, conferences on this subject were not with leaders of energy companies at 5 billion cubic meters. All other “Shale gas is a huge number carried out in Russia nor globally. for development of deposits in his projects, including Europe, are still of wells with very low deposits Now the topic of shale gas is eagerly country. Andrei Klyuyev, fi rst deputy under preliminary examination or (hundreds of times lower than that discussed not only by scientists but prime minister of Ukraine, said that discussion. of wells in traditional fi elds)”. also politicians and businessmen. his country also wants to acquire the There are political forces opposing With these deposits sharply decreasing Even Gazprom does not dismiss technology of shale gas production the development of shale gas in within one to two years, all the drilling the idea of acquiring a company, 1 from the Americans as the Financial the United States because of the time necessary, and drilling in large exploring and producing shale gas Times publishes an article titled potentially adverse environmental volumes will leave the landscape in the United States, and examining “Shale Gas will Change the World” impacts that could result, especially “resembling the lunar surface”. technologies used and profi tability and predicts a rapid decline of the in New York. People are concerned up close. energy power aff orded to Russia. about the eff ects this production Realists It is obvious for “realists” that According to estimates by the process will have on the water After setting aside all the Explosions perforate as development continues for International Energy Agency, quality. misunderstanding, resentment and the pipe shales, the true winners will

world reserves of shale gas are 2 be those that are able to off er comparable to those of conventional advanced equipment and service The conventional process of drilling Method of horizontal drilling natural gas. The Department of in production. With this in mind, Energy projects that by the year TMK is a signifi cant resource for optimists card for “optimists” is the example 2035, drilling of shale gas will the future. Premium threaded This crowd tends to put the of the US bypassing Russia in gas grow by 5.3% while imports of gas connections are widely used in expansion of shale gas production production in 2009 primarily due will decrease by 2.6% annually. Fracturing opens the gas industry and are quite in the context of energy security. to an increase in unconventional According to American researchers, up the rock suitable for the development of oil formation As hydrocarbons rise in price, the gas production including tight gas, reserves in the US are estimated at shale fi elds. The North American ways to deliver them becomes more shale gas, and methane from coal 108 trillion cubic meters compared 3 division of TMK has its own line complicated. Couple this with the deposits. As a result, the US became to 99 in China and Central Asia, of connections called ULTRA™ global political climate as the US an exporter versus an importer of gas 60 in Latin America, Australia and which are used by 8 of the top 12 and Europe both seek to be self- vessels with liquefi ed gas from the New Zealand with 65, Europe with companies developing oil shale reliant in energy resources and not were bound for Europe 14.4 and estimates of reserves of deposits in the US. The growing depending on supplies from the instead of America, thus resulting in a shale gas in Russia ranging from production of shale gas has Transportation of Persian Gulf, Russia, and Iran. decline of gas prices in the European 14 to 200 trillion cubic meters. escaping gas to the increased orders and TMK IPSCO In this game of argument, the trump market. Large reserves of shale gas – about surface has increased its capacity.

12 YOURTUBE 13 YOURTUBE technology

Oil deposits Gas deposits TMK IPSCO’s facilities

engineers were confident that these premium connections could curve the wells at tighter angles, the level of horizontal drilling began to outpace that of directional drilling. In 2008, directional drilling became the driving force of the U.S. shale plays, and the training ground of the Barnett Shale of the 1990s was replaced by the Haynesville Shale as the new horizon for technology. In an area where more than 90 percent of natural gas rigs are horizontal or directional, premium connections became the centerpiece of the completion strings, with particular preference for TMK IPSCO’s patented ULTRA™ Premium Connections U.S. Shale Gas Production family of products. The demand for equal strength in both tension and compression, high torsion strength Continues to Heat up____ Text: John Mandel, ТМК IPSCO for rotation and superior sealing through metal-to-metal seals

Although the eyes of the world have been focused recently on the Gulf Coast TMK will be ready to work closely with end of Louisiana, the state is also a major part of an energy success story that has users to drive the innovative solutions needed quietly been unfolding in the continental U.S. The production of natural gas to access these burgeoning markets from shales such as the Haynesville Shale of Louisiana and East Texas is one of the most exciting trends in onshore oil and gas exploration and production separated TMK IPSCO’s product line today. In fact, there are sufficient quantities of recoverable shale gas in North from every other type of premium natural gas rigs are either horizontal Europe, which holds its own wealth America – up to 3,842 Tcf (trillion cubic feet) – to supply U.S. natural gas needs connection on the market. The or directional, with horizontal rigs of shale gas in regions such as for 45 years. Shale gas also may account for more than 30 percent of the superior strength, performance and accounting for 65 percent and Poland, Northern Germany and technically recoverable gas reserves in the U.S. value of these products make them directional rigs for 15 percent of this the Southern North Sea. To date, the leading premium connection total. The vast majority (83 percent) however, virtually none of the shale choice of major and independent of natural gas rigs are located in the gas in Europe has been developed lthough the industry has vertical drilling simply cannot Barnett Shale in Texas as their operators alike. states of Texas, Oklahoma, Louisiana, commercially. Innovations such as known about shale gas for overcome. A traditional vertical training ground and continued to Today, natural gas drilling accounts Arkansas and Pennsylvania – the ULTRA™ Premium Connections will Adecades, developing the well cannot yield enough natural push the envelope by directionally for two-thirds (66 percent) of all homes of the “Big Five” shales be needed to access those resources, technology to extract it safely and gas for profitable operation, as the curving their well strings in U.S. rigs. In addition, four out of five (Barnett, Woodford, Haynesville, which by some estimates could economically has posed a major resources are trapped horizontally attempts to reach new shale layers. Fayetteville and Marcellus). TMK prove as much as 549 Tcf – about challenge. Shale gas is located deep in between the deep, tightly pressed Innovative fracturing techniques, IPSCO’s manufacturing facilities 14 percent of the size of North within shales in source rock that shale layers. However, advances employing multiple fracturing and are strategically located along the America’s reserves. Although Europe is beyond the reach of traditional in horizontal drilling, hydraulic higher fracturing pressures, were backbone of these shale plays to is a few years away from shale drilling techniques, making it fracturing and rising natural gas also introduced. provide outstanding support near drilling, the need for natural gas, necessary to fracture this rock so prices during the past several As the curvature of the wells customers’ well locations. the cleanest-burning fossil fuel, is that the gas can flow. Adding to the years have finally made recovery of became more severe and fracturing Because of the advances made in great because Europe imports the difficulties of extracting shale gas unconventional shale gas resources pressures increased, standard API horizontal drilling, shale gas has majority of its natural gas. Some are the fact that the rock has very financially viable. The concept of connections reached their maximum proven itself as an economical and experts believe that Poland could low permeability, almost no drainage horizontal drilling was introduced performance capabilities. It became environmentally friendly means of be the next Haynesville, and TMK radius and is very heterogeneous. in the 1990s, but it was the advent apparent that there was tremendous helping ensure America’s energy will be ready to work closely with The extreme depth, pressure and of directional drilling that began need for a new breed of premium independence for decades to come. end users to drive the innovative narrow pay zones of these shale to change the face of shale drilling connections designed specifically The lessons learned in U.S. shale solutions needed to access these plays are significant barriers that more recently. Engineers used the to master the shale plays. Once ULTRA™ Premium Connections drilling will likely be applied in burgeoning markets.

14 YOURTUBE 15 YOURTUBE partners

Pipes for the Caspian Sea

In this issue, YourTube opens a new heading called “Partners”. In this category we talk about partnerships and major clients of TMK, joint ventures and future cooperative efforts. In this segment, we focus on the relationship of TMK with one of the largest oil companies in Russia, Lukoil.

____ The press office of OAO LUKOIL

Lukoil has worked with TMK for hydro-sulfuric pipes undergo heat many years now and is one of its treatment which modifies the largest clients. Vagit Alekperov, structure of the metal, making them President of Lukoil, visited the high strength products. They have Volzhsky Pipe Plant (VTZ) in been used by Lukoil in oil and gas November of 2008, which set fields in the extreme Far North. a symbolic milestone in the Lukoil also purchases premium TMK relationship of the two companies. tubing with threaded connections He visited the Welding Shop of VTZ as part of the import substitution for a better understanding of the program. These products are used new mill used in the production primarily in a gas condensate field of longitudal welded thick-walled called Yuri Korchagin in the Russian large diameter pipes that are used region of the Caspian Sea. TMK L ukoil

in the construction of field pipelines, manufactured 8.2 thousand tons of © trunk oil and gas pipelines, and these pipes in 2009 for Lukoil. subsea pipelines. Because of the Technical specialist and managers The field is named the pursuit of the best possible technical capabilities of the mill in of both companies continue to after Yuri Korchagin technological solutions available. Lukoil's Scale: From Siberia to America , it has no equals in Russia. work together in an effort to in the Russian region The reliability of pipelines, with >>> Mr. Alekperov truly appreciated improve performance properties of the Caspian Sea prevention of oil and petroleum LUKOIL – One of the leading vertically integrated oil companies. hydrocarbon reserves. The Company's share in global oil reserves the quality he observed and looked of pipes used in the extraction products leaks, is a major priority of The main oil production region of the company is in Western is about 1.1%, and in world oil production – about 2,3%. The forward to a very long relationship and movement of oil and gas Lukoil. This focus makes the direct Siberia. Lukoil owns modern refineries, gas processing and company plays a key role in the Russian energy sector, accounting between the two companies. under difficult conditions. In and open communication with petrochemical plants in Russia, Eastern and Western Europe, and for 18% of total Russian oil production and 19% of total Russian As directed by Lukoil, TMK has May 2010, Lukoil specialists manufacturers of these products of implement projects for the exploration and production of oil and oil refining. In 2005, Lukoil began implementation of the gas perfected the production of new attended the scientific/technical paramount importance; exchanging gas in Kazakhstan, Egypt, , , Saudi Arabia, program, under which gas production will grow rapidly in Russia types of hydro-sulfuric casing conference “Corrosion-2010” held practical experiences and finding Colombia, Venezuela, Côte d'Ivoire, Ghana, and Iraq. Most products and abroad. and tubing. These products are at the Taganrog Metallurgical solutions to the improvement of are sold on the international market. At the beginning of 2009, Today, Lukoil – Russia's largest oil business group with revenues designed to operate in extreme Plant (Tagmet). Such conferences corrosion resistance and properties the sales network covered 25 countries, including Russia, CIS of more than $80 billion and net profit of more than $ 7 billion – climates and environments with have been a very effective form of pipe are key to driving standards countries and European states, as well as the United States. Lukoil is also the largest taxpayer in Russia. The total amount of taxes high levels of hydrogen sulfide. of communication for TMK with for reliability of pipe in oil and gas is the second largest private oil company worldwide by proven paid by Lukoil in 2009 amounted to $21.5 billion. In the manufacturing process, consumers and scientists alike in applications.

16 YOURTUBE 17 YOURTUBE expo

Over 2,200 exhibitors from 52 countries presented their innovations at the fair, which was attended by nearly 69,000 trade visitors from over 100 countries across the globe

TMK’s outstanding exhibition quickly became the most visited one among the tube manufacturers. The place could rarely offer an unbooked table for people to sit and talk business. Apart from TMK’s good name, such popularity was attributed to the company’s heavy representation at the fair. TMK brought a wide range of people from top decision-makers like heads of North America and Europe Divisions, and directors of foreign trade, marketing and advertising functions, to trade representatives in Europe, plant managers and even technical staff. On Day Two Dmitry Pumpyanskiy, TMK’s Chairman of the Board attended the fair to have several meetings and negotiations and to offer encouragement to the company’s exhibitors. When departing, the Chairman wished from 52 countries presented their of production facilities and new everyone good luck and profitable innovations at the fair that was equipment launched in the crisis business on the fair days to come, as attended by nearly 69,000 trade years of 2008 and 2009. When days Three through Five had much Düsseldorf visitors from over 100 countries the last slide and the speakers’ to offer. across the globe. concluding remarks were complete, Wire & Tube 2010 has become a Text: Director of the Department of External Communications TMK’s gala presentation, followed customers and partners from the truly meaningful event for TMK. ____ Ilya Zhitomirskiy by a reception for the company’s USA, Europe and Asia offered Both established and new business Rendezvous numerous partners and clients, complimentary remarks to TMK. relationships further endorsed the was certainly one of the highlights Wire & Tube 2010 confirmed TMK’s company as a global producer and Hundreds of trade teams representing producers of tubes, cables, wire products and equipment of the agenda on Day One. The premier position in global markets reliable supplier of high-grade descend upon Düsseldorf every two years. Wire & Tube 2010, held in the city from April 12th presentation started with opening and the mutual interest shared tubulars and services to the Oil to April 16th, was the twelfth meeting of the premier trade fair. TMK’s presentation for the remarks by Sergei Bilan, Deputy by the company and its partners and Gas sector. The notorious company’s foreign trade partners was an absolute hit on the schedule and the company’s exhibit General Director for Marketing, who in continuing their international delays and effects from the was widely recognized as a must-see by all fair attendees. also played the part of moderator of cooperation based on the principles remote Icelandic Eyjafjallajoekull the presentation. Sergei Chetverikov, of mutual respect for commitments, volcano did complicate TMK Deputy Director for Foreign Affairs, supreme quality of products and delegations’ trips back to their unny and warm Düsseldorf, discuss. The two years since the last demand, prices and capitalization presented more information on post-sale services. home destinations, but it definitely just emerging from winter, fair were mired with complications in 2009. However, everybody knows the company, its recent production As the fair’s busy days followed, did not overshadow the overall S was besieged by tens of and controversy for the metallurgy that a metallurgist never gives up. and investment performance. He TMK’s information platform served impression of Wire & Tube 2010. thousands of energized people industry. A difficult time only Finally, in Q1 2010 metal markets specially emphasized the 60 percent as a location for both formal There was a strong feeling of attired in business suits launching magnified after three calendar showed the first signs of growth and production growth reported in meetings with prospects and fellow corporate unity and the satisfaction into discussions in all languages quarters of thriving markets in raised spirits across the sector. Q1 2010 versus Q1 2009, which businessmen’s conversations about of being valuable to so many possible. There was plenty to 2008 were replaced by a collapse of This year, over 2,200 exhibitors resulted from a major overhaul new concerns and opportunities. people across the globe.

18 YOURTUBE 19 YOURTUBE expo

Achim Boner, ThyssenKrupp Materials Capital City of German Fashion and Advertising International, General >>> Manager Pipe and Tube Division What is important for each customer? I believe it is to have perfect quality, on-time delivery, and not overpaying for the product. I believe TMK pursues a balanced marketing policy which has won credibility in the market. The quality of the pipes is good and consistent now. Actually the first thing that comes to mind with your company is timely and reliable delivery. Good luck and keep it up!

Freek Graaf, The first written mention of Center in 1971. Düsseldorf TAL Holland, Director Düsseldorf dates back to 1135. hosts the third largest airport in Obviously, it is essential Originally a village, Düsseldorf Germany. Düsseldorf is not only for consumers to keep took its name from the small widely known as a center for getting high-quality river Düssel that flows into the German advertising and fashion products on time and for right bank of the Rhine. In 1288 industries, but also in the last an acceptable price but the village of Düsseldorf was few years the city on the Rhine I think what describes granted the rights afforded a town. has become one of the top TMK best is its evolution. Since then Düsseldorf changed telecommunications centers in TMK integrates new hands many times. Düsseldorf Germany. Düsseldorf also leads technologies, expands was governed by German counts the European patent sector. To business, and strives to be and dukes, twice conquered by the south of the old city up the a good partner for their the French in the 18th century, Rhine is Medienhafen, a media client – both technically and with competitive pricing. joined Bavaria and the Kingdom harbor built in the 70’s and 80’s That’s why we are happy to have TMK as a partner and of Prussia, but each time regained to replace a real harbor that was continue our association together. autonomy. During the four years no longer cost effective after a after World War I, Düsseldorf was trade recession. Medienhafen is a again occupied by France and complex of buildings that includes Giorgio Frigerio, Belgium. Twenty years later, during the Landtag (local parliament) Reliable partner for international companies Benteler Distribution, World War II, the town suffered of North Rhine-Westphalia, CEO from bombing campaigns of the Rheinturm – Düsseldorf TV Tower, I will not talk about Allies lasting up to 1945. and headquarters of various media Samer S. Al-Reziza, Steve Livingston, products as the quality In 1946 Düsseldorf became companies including WDR, nrw.tv, Al-Reziza Trading & Kelly Pipe Co. LLC, Senior has already been stated the capital city of the German Antenne Düsseldorf, and GIGA. Contracting Co, Deputy Vice President Central before. I would rather state of North Rhine-Westphalia. Düsseldorf is second only to managing director Region talk a minute about Despite an abundance of plants Frankfurt in banking and business Our relationship with We go back 40 years to our association with and factories, the city was mostly and hosts the Düsseldorf Stock TMK started back in 2004 the time when we were TMK in distribution of recognized as an administrative Exchange – one of the largest in and has grown stronger working with the former pipes – particularly center and had the nickname of Germany. Numerous international ever since. TMK – the company that was part of in the industrial ‘the Ruhr Basin’s Writing Table’. firms like Vodafone Germany, technical team and IPSCO and long before the sector – across Europe. Modern Düsseldorf is a big Metro AG, ThyssenKrupp, e.on, management – have pipe business was acquired We have developed a very open and transparent industrial and commercial center Rheinmetall, Henkel, Degussa, NRW supported us a lot. We by TMK. They have always communication line that we’d like to maintain both full of offices and banks. Düsseldorf BANK, West LB, and e-Plus are started our business been a great customer for from the production point of view and from the is the most developed city of the headquartered in the city. Daimler together in 2006 and we us, particularly in the Rocky commercial point of view. Our distribution network Rhine-Ruhr metropolitan region – Chrysler produces their Mercedes- were able to purchase a lot of OCGT pipes especially Mountains and the Western Region. We have recently spans throughout Romania and TMK is one of the key the most heavily populated region Benz Sprinter in Düsseldorf, just in the years 2006 and 2007 and part of 2008. The forged a new relationship with them based upon the suppliers for the group – not only in Romania, but now of Germany. as Volkswagen AG makes their VW quality and standards of TMK were really good and OCTG pipes and we are looking forward to another 40 in Germany, Italy and additional countries. Of course Today the city is a major economic, Crafters there also. Düsseldorf is more than acceptable. We look forward to working years and continuing our great relationship with TMK we hope the relationship we have developed continues cultural and trade center, famous as “Nippon-on-the-Rhine” with them in the future and we truly appreciate what IPSCO. Our relationship together has been tremendous to grow. Thank you TMK Rus group and we wish all the especially after construction of due to its third largest Japanese they have done for us. the whole time we have worked together and I am sure it best for our partnership together. the Düsseldorfer Messe Exhibition community in Europe. will be even better in the future.

20 YOURTUBE 21 YOURTUBE expo

TMK Debuts at Leading Industry Event ____ John Mandel, TMK IPSCO TMK participated for the first time in a major offshore industry conference and trade show that showcased its industry leadership position and products targeted specifically for this growing market.

included a wide range of technical sessions and panel discussions. This was TMK’s first year at the conference, and the company created a colorful new 20’ by 20’ booth featuring a variety of products that will be introduced this year and certified for use in offshore applications. These include TMK Premium Connections, ULTRA™ Vicki Avril, President & CEO TMK IPSCO, Dmitry Pumpyanskiy, Chairman TMK, Piotr Galitzine, Chairman Premium Connections, Reelable Pipe TMK IPSCO, Scott Barnes, Vice-president & Chief Commercial Officer TMK IPSCO and Large-Diameter Line Pipe for subsea service. The modern-looking booth incorporated interactive product panels that enabled visitors to Bar made of ice with for the future, especially its intent to touch and feel samples of TMK’s TMK's logo grow business in the offshore market. products. These panels boldly The event’s purpose was to emphasized the words “World-Class,” emphasize TMK’s global presence “Performance”, “Exceptional” and and resources to customers. To that “Innovation,” stressing four of the key end, the party featured some of the value drivers for TMK’s customers. best entertainment and food from The booth also utilized panels with around the world. large photos of TMK products in Guests were greeted by African various applications, as well as a drummers and entertained map highlighting the company’s throughout the evening by a global facilities. Pipe sculptures on bossa nova band and Cuban jazz the sides of the booth incorporated band. Food stations representing photos of TMK’s products, people various parts of the world included and plants. Attendees enjoyed cigars rolled onsite by professional cigar rollers a Brazilian meat carving station, “Our objective for exhibiting at the towering seafood table and conference was to create a stronger Making its debut at the show Restaurant in Houston and themed numerous other global delicacies. global image and presence for was a new promotional packet “An Event of Global Proportion”. Many Attendees also enjoyed cigars rolled TMK and its brands throughout the containing the latest TMK catalogs, major TMK customers involved in oil onsite by professional cigar rollers. TMK's booth at OTC-2010 industry,” said Linda Fournier, TMK product literature, promotional and gas exploration and production The combination of exotic food, live IPSCO’s director of marketing and materials and a CD overviewing the attended the function, including music, great ambiance and a fantastic he Offshore Technology the group’s technical program. OTC business development. “Customers company. Booth visitors also had the representatives from ExxonMobil, BP, crowd resulted in a wonderful Conference (OTC) is the also has two endorsing and six told us that they particularly opportunity to take home a variety Devon, Chesapeake, EOG Resources evening. Tworld’s foremost event for the supporting organizations. enjoyed the interactivity of our of TMK-branded items. and Anadarko. Not surprisingly, the party earned development of offshore resources Nearly 73,000 attendees and 2,000 booth and were impressed by our In conjunction with the 2010 Dmitriy Pumpyanskiy, TMK Chairman, rave reviews from guests. Along in the fields of drilling, exploration, exhibiting companies representing wide range of innovative products. Offshore Technology Conference, TMK welcomed the group and provided with TMK’s presence at the Offshore production and environmental more than 110 countries attended The event generated sales leads hosted a corporate party on May 7 for an update about TMK Group’s global Technology Conference, it helped protection. It is sponsored by 12 this year’s program, which was held from around the world and helped approximately 300 representatives of strategy and innovative products. Piotr ensure that the company will industry organizations and societies May 3–6 at the Reliant Center in enhance TMK’s international its key customers and suppliers. The Galitzine, TMK IPSCO Chairman, also remain center stage in the minds of that work cooperatively to develop Houston, Texas. The program also presence.” gala was held at the upscale Tony’s spoke about the company’s vision industry customers.

22 YOURTUBE 23 YOURTUBE sport The Crystal Ball

Stayed in the US____ Sergeу Alekseev, TMK On May 6th one of the basketball courts in Houston saw an unusual matchup of friendly foes. The players were not from the NBA, nor were they college basketball stars, and not even celebrities of Hollywood and music. This was a competition between TMK IPSCO (USA) versus OAO TMK (Russia) serving as an event in the OTC 2010.

ТМК Trading House, Moscow Representative office ТМК, : TMK Italia s.r.l. 40-2a, Pokrovka Str., 29, Arshabil chaeli Str., “Nebitshi” hotel, Piazza degli Affari, 12, 23900 Lecco, Italy Moscow 105062, Russia 1939, Ashgabat, Turkmenistan Tel/Fax: +39 (0341) 36-51-51, Tel: +7 (495) 775 7600, Tel/Fax: +993 (12) 48-87-98 +39 (0341) 36-00-44 Tel/Fax: +7 (495) 775 7602 E-mail: [email protected] E-mail: [email protected] E-mail: [email protected] ТОО ТМК-Kazakhstan TMK IPSCO Branch office ТМК Trading House, 38/1, office # 5, Zheltocsan Str., Astana, 8300 FM 1960 West, Suite 350, Volzhskiy 010000, Kazakhstan Houston, TX 77070, USA 6, Avtodoroga 7 Str., Volzhskiy, the Tel/Fax: +7 (7172) 31-56-08, 31-08-02 Tel: +1 (281) 949-10-23, Volgograd region, 404119, Russia E-mail: [email protected] Fax: +1 (281) 445-40-40 Tel: +7 (8443) 22-27-77, 55-18-29 E-mail: [email protected] Tel/Fax: +7 (8443) 25-35-57 Representative office ТМК, China APT19 I, NO.48 DONGZHIMENWAI Street, TMK North America, Inc Branch office ТМК Trading House, Dongcheng District, , 8300 FM 1960 West, Suite 350, Houston, Polevskoy China ZIP. 100027 TX 77070, USA 7, Vershinina Str., Polevskoy, Tel: +86 (10) 84-54-95-81, Tel: +1 (281) 949-10-23, he Russian team was made the Sverdlovsk region, 623388, Russia +86 (10) 84-54-95-82 Fax: +1 (281) 445-40-40 up of managers attending Tel: +7 (34350) 3-21-05, 3-32-75 Tel/Fax: +86 (10) 84-54-95-80 E-mail: [email protected] Tthe conference and the Tel/Fax: +7 (34350) 3-56-98 E-mail: [email protected] management of TMK Premium ТМК Middle East Services in Moscow. Representing to put on a friendly competition Branch office ТМК Trading House, Representative office ТМК, P.O. Box 293534 Office 118, Block 5EA, the US were managers of TMK exhibiting only the best of qualities – Kamensk-Ural’skiy 10 Anson Road #33-06A International Dubai Airport Free Zone, IPSCO in Chicago and the sales uncompromising tenacity and 1, Zavodskoi proezd Rd., Kamensk-Ural’skiy, Plaza, Singapore 079903 Dubai, office in Houston. understanding. The players of the Sverdlovsk region, 623401, Russia Tel: +65 (622) 33-015 Tel: +971 (4) 609-11-30, The American team employed a the Russian and American teams Tel: +7 (3439) 36-37-19, 36-30-01 Tel/Fax: +65 (622) 33-512 Fax: +971 (4) 609-11-40 tactic of frequent substitution of were able to get to know each Tel/Fax: +7 (3439) 36-35-59 E-mail: [email protected] players and this made the difference, other, compete hard and test their TMK Africa Tubulars allowing participants to be rested opponent, and then continue their Branch office ТМК Trading House, TMK Global AG 1st Floor, Convention Tower, Cnr. and energetic throughout the match. companionship after the match. Taganrog 2, Bldv. Du Theatre, CH-1211 Geneva, CP Heerengracht Str. & Coen Steytler Ave. The first quarter saw the Russians The basketball game in Houston 1, Zavodskay Str., Taganrog, 5019, Switzerland Foreshore, Cape Town 8001, South Africa much more active and impressive was another step towards the the Rostov region, 347928, Russia Tel: +41 (22) 818-64-66 Tel: + 27 21 403-63-78, than their American opponents. Team converging of management teams Tel: +7 (8634) 65-03-58, (8634) 32-42-02 Fax: + 41 (22) 818-64-60 Tel/Fax: + 27 21 403-63-01 OAO TMK had the advantage at and a more united international Tel/Fax: +7 (8634) 32-42-08 E-mail: [email protected] E-mail: [email protected] halftime but they started to struggle Sergey Bilan awarded the captain of company at TMK. It was decided with exhaustion and the Americans TMK IPSCO, Sam Smolak, VP of IT, a after the competition that such Representative office ТМК, Azerbaijan TMK Europe GmbH took advantage of their long bench. beautiful crystal trophy shaped in the meetings would take place on 22, Karabakha Str., , AZ1008, Hohenstaufenring 62, D-50674 Koln, Tied at 33 all, TMK IPSCO then seized form of a basketball and crafted at a regular basis. The players of Azerbaijan Germany the lead and never relinquished it, JSC TAGMET. As competitive and fun the Russian team are ready for a Tel/Fax: + 994 (12) 496-19-18 Tel/Fax: +49 (221) 27-23-89-10, winning the game 47–40. as the match was, the true importance re-match to take revenge on their E-mail: [email protected] +49 (221) 272-00-81 In a small ceremony at the end of was the value of the meeting of the American counterparts and bring E-mail: [email protected] the game, Deputy General Director two teams. Participants were able the trophy back to Russia.

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