Russia-based TMK, one of the world's leading oil and gas steel pipe producers, has announced that it has signed an agreement with Gazprom Neft to apply formula pricing for supplies of pipe products. Gazprom Neft is the fourth largest oil producer in Russia.
The price formula is based on market prices for commodities and feedstock used in pipe production. It is the first agreement of this type to be signed by Gazprom Neft with a Russian pipe manufacturer. A similar agreement has been in force since 2012 between Gazprom Neft's parent company Gazprom and leading Russian pipe producers.
TMK has already been commissioned to supply its first formula-priced pipes to Gazprom Neft, with a batch of casing pipes to be shipped by the end of the current month.