1 SGM GROUP OF COMPANIES 2 SGM GROUP OF COMPANIES SGM Group of Companies employs over 20 000 people SGM Group has over 20 000 employees of construction and other professions, among them welders, doggers, pipelayer operators, excavator operators, etc. More than 90% of its employees are workers, technicians and engineers of highest qualification. Every third employee of the Group has a university degree, 71% of the workforce has secondary (vocational and other) education. SGM Group supports the succession strategy and has quite a number of dynastic families; some of them are in business for more than 70 years! The Group has well-developed mentoring system, encourages traditions transfer to succeeding generations and respect for elders. 3 SGM Group SGM Group Staff Composition by Category Staff Composition by Gender 22% 11% Management Female Professionals and office staff Male Production workers, labourers 67% 22% 78% SGM Group SGM Group Staff Composition by Level of Education Staff Composition by Age 29% 20% 25% University education Under 30 Secondary 31–50 (vocational or other) 51 and over education 71% 55% Every fourth employee of SGM Group is under the age of 30 4 SGM GROUP STRUCTURE SGM Group of Companies consists of: > LLC «STROYGAZMONTAZH» – the parent company of the group; And major construction enterprises: > JSC «Lengazspetsstroy» > JSC «Krasnodargazstroy» > LLC «SCC Gazregion» > LLC «Neftegazkomplektmontazh» > JSC «Volgogaz» > JSC «Volgogradneftemash» – the largest high-tech gas, oil and petrochemical equipment manufacturer. The Group’s subsidiaries, territorial-production construction departments and standalone divisions operate in more than 50 towns and settlements in Russia. SGM Group LLC «STROYGAZMONTAZH» JSC «Lengazspetsstroy» JSC «Krasnodargazstroy» LLC «SCC Gazregion» JSC «Volgogradneftemash» JSC «Volgogaz» LLC «Neftegazkomplektmontazh» 5 STROYGAZMONTAZH Volgogradneftemash Volgogaz Est. 2008 Est. 1941 Est. 1958 STROYGAZMONTAZH (SGM) is the parent One of the Volgograd’s primary taxpayers. Over the years of operation Volgogaz has company of SGM Group. Volgogradneftemash is the largest manufacturer of commissioned about 13,000 km of gas high-tech equipment for the gas, oil and pipelines and gasified over 2.5 million The company is involved nearly in all major petrochemical industries. Volgogradneftemash households. For the first time the local infrastructure projects for the oil and gas comprises the Volgograd Oil Machine-Building company has participated as the general industry, namely: construction of the Dzhubga – Plant and the Kotelnikovo Steel Reinforcing Mill. contractor in the construction of 12-string Lazarevskoye – Sochi, Gryazovets – Vyborg, Virtually all Russian gas producing and gas crossing over the Kuibyshev water storage Pochinki – Gryazovets gas pipelines, construction transportation plants, oil refineries of the largest reservoir, modernized some large Heat and of the Sakhalin – Khabarovsk – Vladivostok, oil companies are fitted with the process Power Plants to use gas fuel and took part in Southern Corridor, Bovanenkovo – Ukhta, Ukhta equipment manufactured by construction of Urengoy – Pomary – – Torzhok trunk gas pipeline systems, Russian Volgogradneftemash. Uzhgorod, Urengoy – Center gas pipelines. regions gasification programme, etc. Lengazspetsstroy SCC Gazregion Est. 1968 Est. Lengazspetsstroy corporation was founded on 2010 the basis of Mosgazprovodstroy SMU-7 SCC Gazregion specializes in construction of trunk (Installation and Construction Department), but pipelines, inter-settlement gas pipelines, was then reorganized into Lengazspetsstroy, compressor stations and gas distribution facilities. Joint-Stock Company. During 45 years of The company takes an active part in the Russian operation it participated in virtually all state Regions Gasification Programme (Gazprom OJSC) pipeline construction projects, beginning from and performs nearly 40% of all related works. the Yamal Peninsula to the Central Asia, from the Baltic States to the Sakhalin Island, where the key projects are the Urengoy – Pomary – Uzhgorod, Yamal – Europe, Blue Stream trunk Neftegazkomplektmontazh gas pipelines, etc. Est. Krasnodargazstroy 2005 NGKM was founded on the basis of the Est. enterprise specializing in repairs of the local 1979 and imported machinery. Nowadays NGKM is Krasnodargazstroy participated in construction of one of the youngest and rapidly developing the Pochinki – Gryazovets, Ukhta – Torzhok, Yamal construction companies working in the Russian – Europe, Blue Stream, SRTO – Torzhok trunk gas oil and gas sector. pipelines, etc. The company successfully The company took part in construction of the operates in in the CIS states and the following Ukhta – Torzhok (1st stage), Pochinki – countries: Algeria, India, Iran, Iraq, Libya, Nigeria, Gryazovets, Izobilny CS – Nevinnomyssk, Finland and Cuba. Southern Corridor trunk gas pipelines, etc. 6 SGM Group takes part in almost all major infrastructure projects of strategic value to Russia km compressor 4 850 29stations of high and medium with a total capacity of pressure gas pipelines were constructed 2 097 MW were built Since its establishment SGM Group has constructed over 4,850 km of high and medium pressure gas pipelines. During this period the Group has built and commissioned 35 onshore facilities: 29 compressor stations with a total capacity of 2,097 MW, where 114 gas pumping units were installed along with 6 inventory bases and local construction offices. The Group has also modernized the underground gas storage facility (3 units of 15 MW GPUs). 7 populated 3 000 centers were gasified 15 290 km of low pressure gas pipelines were constructed SGM is a participant of the Russian Regions Gasification National Programme, originated by Gazprom OJSC, from 2008 till 2014. SGM Group has constructed 15,290 km of inter-settlement gas pipelines and 1,023 gasification facilities; 3,000 populated centers in 66 regions were gasified. Such area of activity as capital repairs rapidly develops in SGM Group, thus from 2009 to 2014 were repaired 3,404 km of trunk gas pipelines, 286 gas distribution stations, 89 underwater crossings and 60 process pipelines for CS. 8 SGM Group’s main areas of activity: > trunk pipelines and onshore facilities construction > offshore construction > Russian regions gasification > master overhaul of gas pipelines > production of various equipment for the oil and gas industry > engineering > procurement, provision of spare parts, etc. STROYGAZMONTAZH is a member of the following institutions: > SRO "Association of gas and oil complex builders" > SRO NP "Design Engineer" > SRO NP "Prospecting Engineer" > International Pipe Line & Offshore Contractors Association (IPLOCA), and licensed for geodesic activities. The Quality Management System of the STROYGAZMONTAZH LLC. complies with GOST ISO 9001-2011, ISO 9001:2008, GOST R ISO 14001-2007, ISO 14001-2004, OHSAS 18001:2007 and confirmed by the relevant certificates. 9 SGM Group’s Construction Machinery Composition of the Fleet 1% 2% 3% 11% 7% 12% 17% 16% 29% 2% Bulldozers Process machines Pipelayers Cranes Excavators Hoisting machines Backhoe loader Tractors Welding machines Loaders 10 DZHUBGA – SGM LAZAREVSKOYE – SOCHI GROUP’S TRUNK GAS PIPELINE Total length Length of the offshore MAJOR of the pipeline is section is PROJECTS 177 km 159,5 km RUSSIA Dzhubga-2 AGDS Dzhubga-1 AGDS Dzhubga Novomikhailovsky Novomikhailovskaya AGDS Tuapse Tuapse AGDS Lazarevskoye Sochi Adler AGDS Kudepsta AGDS Kudepsta BLACK SEA ABKHAZIA 11 During the Dzhubga – Lazarevskoye – Sochi gas pipeline construction the most advanced technologies were applied and special emphasis was placed on compliance with ecological requirements and execution of environment-oriented activities. SGM was named the winner of the 100 Best Companies of Russia, Environment and Environmental Management contest, within the Technologies of the Year category, for the Dzhubga – Lazarevskoye – Sochi gas pipeline construction. The competition expert committee considered the project as the best implementation of The gas pipeline was built and commissioned in available technologies to decrease the negative June 2011. impact on the environment. The Dzhubga – Lazarevskoye – Sochi gas pipeline is a part of the Olympic Facilities Construction and Development of Sochi as a Year-Round Alpine Resort Programme, approved by the Government of the Russian Federation. The gas pipeline was built to provide a reliable supply of energy to Sochi and the Olympic facilities under construction. It will facilitate the Tuapse District gasification and Gas pipeline installation on the seabed Horizontal Directional Drilling decrease the lack of energy in the Black Sea Offshore section Tie-in Drilling “in outward direction”, coast of the Caucasus. The gas pipeline length installation without seabed interference 132and with overlying soils on the well amounts to 177 km, 159.5 km of which are Pipelaying bottom (3.5 m above the seabed) installed on the seabed of the Black Sea, and vessel Point 17.5 kilometers represent the onshore section. Welding of penetration The pipe diameter is 530 mm. The pressure is 9.8 MPa. Drill The onshore and offshore gas pipeline sections string are connected by five crossings, built by the horizontal directional drilling method (HDD), thus minimizing the negative effect on the ecological system of the Krasnodar Territory. Construction of all crossings was performed in extremely complicated soils accompanied by significant altitude differences, fractures