TMK Signs Formula Pricing Agreement with Gazprom Neft
OREANDA-NEWS. TMK, one of the world’s leading producers of tubular products for the oil and gas industry, signed an agreement with Gazprom Neft to apply formula pricing to pipe products.
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 and the leading Russian pipe producers.
TMK has already been commissioned to supply its first formula-priced pipes to Gazprom Neft: a batch of casing pipes will be shipped in April 2014.
"Formula pricing is a tool facilitating transparent B2B cooperation and prompt responses to changes in feedstock prices. Collaboration with Gazprom under a similar agreement has proved to be effective. We are positive about a broader use of formula pricing approach and believe it will enhance mutual trust and encourage cooperation between the companies," said Alexander Shiryaev, TMK CEO.