OREANDA-NEWS. November 25, 2009. The meeting of the Ukraine-Russia Committee on economic cooperation, which took place in Yalta last week, failed to approve a decision about the terms of Ukrainian pipes delivery to Russia. The Ukrainian version of a new draft of the duty free agreement includes a proposal of about a 30% decrease in the duty free quota (down to 300ktonnes per year), keeping this level unchanged for the next three years.  This agreement deals with pipes of oil assortment, 80% of which are produced by the Interpipe Holding companies, including the Interpipe Novomoskovsk Pipe Plant < NVTR UK BUY >.  

Millennium Capital: the structure of the Ukrainian pipe exports has changed significantly in recent years. The Ukrainian exports have switched from large diameter gas pipes (LDP) to small and middle diameter pipes for oil extraction. This fact and a competitive price-quality ratio made sure that Interpipe continues its presence in the Russian pipe market. The new agreement is quite likely to be ultimately signed, in view of support by the Russian Antimonopoly authorities and by the five biggest Russian oil companies. However, in return, the Russian government demands respective concessions from Ukraine. According to various sources, these may include cutting down import duties for Russian fertilizers and railway point switches. Millennium Capital believes that the negotiations, which have to be completed by the end of 2009, will be a success due to an interest expressed by the both negotiating parties.