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Gazprom following comprehensive import substitution strategy

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World Pipelines,

The Gazprom Board of Directors took note of the information about measures to facilitate the integration of domestically-manufactured equipment and technologies in the production operations of the Gazprom Group.

It was highlighted that the Company had been for many years making consistent efforts to reduce the procurements of foreign equipment and technologies in favour of their domestic counterparts. In 2017, the share of Russian materials and equipment in Gazprom’s procurements amounted to 99.4%, with pipes and fittings at 100%.

The Company imposes stringent requirements on the quality of its purchased products, thereby fostering the development of Russian science, helping domestic manufacturers create and deploy cutting-edge technologies and solutions, and facilitating upgrades in a variety of industries.

Import substitution is carried out in several key fields. In 2013, Gazprom started to develop the industrial potential of Russian regions. By now, there are roadmaps with 21 regions, aiming for a wider use of regional high-tech products by the Company. The collaboration provides incentives for building up the sci-tech and industrial capacities of domestic suppliers and manufacturing competitive high-tech products for the needs of Gazprom.

In the three best-performing constituent entities – the Perm Territory and the Voronezh and Tomsk Regions – roadmaps are being implemented in a trilateral format involving the Ministry of Industry and Trade of the Russian Federation. The roadmaps include 15 projects, which are being carried out by leading regional enterprises for the benefit of Gazprom. In particular, import-substituting equipment is being designed for the purposes of subsea production, well workover, and gas pipeline repair.

Another effective tool for co-operation between Gazprom and domestic manufacturers is a long-term contract for batch production, supply and maintenance of import-substituting products in the amount equal to guaranteed future purchases. This scheme provides Gazprom with high-quality Russian goods at competitive prices and gives manufacturers a predictable workload. Today, such contracts are in effect with TMK, Tomsk Machine-Building Technologies, and Salavat Catalyst Plant, among others.

Gazprom actively makes use of innovations and takes part in their development, investing significant amounts in research and development (R&D) and pre-investment studies every year. The Company’s sci-tech cooperation extends to corporate and third-party research entities, Russian higher education institutions, and businesses in the related industries.

Efforts to develop and introduce Russian equipment and technologies call for improvements in the national and corporate technical standards for import substitution in the areas of engineering and manufacturing. To that end, the Company interacts with the relevant executive authorities and utilises the INTERGAZCERT voluntary certification system.

Gazprom’s import substitution policy contributes to the localisation of foreign equipment manufacturing in Russia. For instance, thanks to close co-operation between Gazprom, Linde and Power Machines, the manufacturing of spiral heat exchangers for natural gas liquefaction and processing facilities was launched in St. Petersburg. On 20 July 2018, a ceremony was held to celebrate the shipment of the first spiral heat exchanger produced for the Amur Gas Processing Plant.


Image courtesy of Gazprom.

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