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18 May 2015

NLMK Group signs agreement with Paul Wurth for new gas cleaning system for blast furnance 6

NLMK Group, the largest steel producer in Russia and one of the most efficient steel companies in the world, has signed an agreement with Luxemburg-based engineering company Paul Wurth S.A. for the engineering and supply of equipment for a new gas cleaning unit at Blast Furnace 6 of NLMK’s Lipetsk production site.

It is planned that the construction of the gas cleaning unit for Blast Furnace 6, which has an output of 3.2 million tonnes per year, will begin in Q4 2015 and be completed in Q1/Q2 2016. In parallel, NLMK will begin testing of the top-pressure recovery turbine (TRT) which is currently under construction that will utilize excess blast furnace gas pressure.

Capex for the gas cleaning unit project is in excess of RUB 780 million.

Konstantin Lagutin, Vice President for Investment Projects, said: “The gas cleaning project, implemented as part of Strategy 2017, is aimed to further enhance production efficiency and to further develop the company’s inherent potential. The new unit will provide a fivefold improvement in Blast Furnace gas cleaning efficiency and channel it to the green energy facility, the top-pressure recovery turbine designed for electric energy generation through utilization of excess gas pressure that is currently under construction.”

The TRT under construction behind Blast Furnace 6 will be the second in the new TRT station complex. The already-installed TRT-1 utilizes gasses from Blast Furnace 7 and is currently undergoing hot testing. The two turbines are designed to have a combined output of 28 MW, increasing the company’s electric power self-sufficiency from 54% to 56% and reducing its dependence on external suppliers of electric power by 200 million kWh per year, which is around 6% of the current purchase volume.

About NLMK Group

NLMK Group is the largest steelmaker in Russia and one of the most efficient in the world. NLMK’s high-quality 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 $10.4 billion in revenue; $2.4 billion in EBITDA; and a net profit of $845 million in 2014.

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).

About Novolipetsk (NLMK’s main production site in Lipetsk)

Novolipetsk is the main production site of NLMK Group, Russia’s leading manufacturer of steel and high value added rolled products, and one of the most efficient steelmaking companies in the world. Novolipetsk is the nucleus of NLMK Group’s single production chain, with assets in Russia, the EU and the USA.

Currently, the steel production volume of the Lipetsk site is in excess of 12 million tonnes per year, or approximately 18% of all steel produced in Russia, and approximately 80% of all steel products produced by NLMK Group.

Novolipetsk’s high-quality steel products are used in various strategically important industries, from construction and engineering to the manufacture of power-generating equipment and large-diameter pipes.

Novolipetsk produced 12.56 million tonnes in 2014. This represents an all-time high over the 80 years of NLMK’s history. This record performance was supported by productivity improvements throughout the value chain of the site. With capacities running at 100%, production grew by 1.3% compared to 2013.