News

1 October 2015

NLMK and NOVATEK sign 5-year contracts for supply of natural gas

NLMK and NOVATEK sign 5-year contracts for supply of natural gas
NLMK Group, Russia’s leading steel-making company; and one of the most efficient steelmaking companies in the world, has signed long-term agreements with NOVATEK for the supply of natural gas to all of NLMK Group’s Russian production facilities.

The contracts have been signed for a term of 5 years and will come into effect on January 1st, 2016. The agreements provide for the supply of an annual volume of 2.8 billion cubic meters of natural gas to NLMK Group’s production facilities. This will cover 100% of NLMK Group’s natural gas needs that were previously met by Gazprom and other companies.

Alexander Starchenko, NLMK Vice President for Energy, said:

‘One of the key goals of NLMK Group’s Strategy 2017 is to enhance the efficiency of all production processes. The agreements we’ve reached with NOVATEK are noteworthy due to the flexible conditions for delivery of the key source of energy for the Group’s energy-intensive business; enabling us to make yet another step towards achieving our strategic goal.’

Lev Feodosyev, Deputy Chairman of the Management Board and Commercial Director of NOVATEK, said:

These contracts are an important step in the execution of our marketing strategy aimed at concluding long-term agreements with our clients. We are very glad to add NLMK to our portfolio, thus obtaining a reliable partner with stable gas consumption.’

About NLMK Group

NLMK Group is the largest steelmaker in Russia and one of the most efficient in the world. NLMK’s metal products are used in various industries, from construction and engineering to the manufacture of power-generating equipment and offshore wind turbines.

NLMK's production assets are located in Russia, Europe, and the United States. The Company’s liquid steel production capacity is over 17 million tonnes per year, of which about 16 million tonnes are produced in Russia.

NLMK has the most competitive cash cost among global manufacturers; and one of the highest profitability levels in the sector. The company generated $4.4 billion in revenue; $1.1 billion in EBITDA; and a net profit of $491 million in H1 2015.

NLMK’s ordinary shares are traded on the Moscow Stock Exchange (ticker symbol: NLMK), and its global depositary shares are traded on the London Stock Exchange (ticker symbol: NLMK:LI).