TNK-BP and TMK Sign Term Cooperation Agreement
26 May 2005
TNK-BP and TMK, the major Russian oil pipeline manufacturer, have signed an agreement on cooperation and technological collaboration which sets new benchmarks in supply chain management practices in Russia.
The agreement is valid for 3 years with a value of up to $500 million.
Under the agreement TMK will supply TNK-BP with line and down-hole pipe to support TNK-BP’s pipeline integrity improvement program and its production growth agenda.
TMK has established an industry record of performance and makes a broad range of pipeline products. It has a strong manufacturing capability, good technologies, qualified staff and a commitment to ensure supplies of high quality products to TNK-BP
Under the terms of the agreement, TNK-BP will become a priority customer for TMK and TMK will ensure competitive pricing over the long-term. TNK-BP will also provide technical advice to assist in continued quality improvement for TMK’s operations.
“The agreement with TMK is the first deal of its kind in Russia,” said Robert Dudley, President and CEO, TNK-BP, “Pipes are clearly a critical success factor in the oil and gas business, and we are pleased to take this first step in building a long term relationship with TMK, Russia’s leading pipe manufacturer. We believe there are concrete advantages for ourselves and also for the industry in creating such longer-term collaboration.”
Dmitri Pumpyansky, General Director, TMK, noted: “Such cooperation between TMK and TNK-BP is good news for both parties. The agreement establishes a cost effective long-term price structure and will improve performance of the two companies. We share TNK-BP’s ambition to raise our operations to best international standards, and we hope that our joint work will help to achieve that goal. “
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