4.10.Premium connections and oilfield services

We are one of the world’s largest premium connections producers and the absolute leader in the Russian premium connections market.

Pipe with premium threaded connections is used for oil and gas wells operating in adverse climatic and geological conditions, including offshore, deep-sea and Far North locations, horizontal and directional wells, and hard-to-reach hydrocarbon (shale gas and oil sand) field development. These connections offer high strength and tightness, along with enhanced resistance to high torsional, bending and tensile stresses.

Application of premium products:

High H2S and CO2 concentration
High temperatures
Arctic environment
Horizontal directional drilling
Drilling with casing
Steam Assisted Gravity Drainage (SAGD)
GreenWell lubricant-free connections

TMK UP EVOLUTION

TMK’s share in the premium pipe market

In the reporting year, TMK was able to maintain its leadership in the Russian market for tubular products with premium threaded connections by boosting its share from 65% in 2014 to 75% in 2015. This growth was driven, among other things, by declining imports of premium tubular products and import substitution programmes put in place by many companies.

Backed by many years of experience in premium product shipments, we are always ready to offer our customers unique engineering capabilities and highly efficient pipe solutions that cater all their expectations. In 2015, TMK was able to considerably expand its customer base and launch shipments of premium products under import substitution programmes adopted by Russian oil & gas majors.

In the reporting year, we applied a new approach as part of our relationship with Gazprom on premium tubular products. Under this approach, TMK assumes the responsibility for designing, rolling out, manufacturing, shipping, and providing technical support for import substituting products for existing and potential fields, while Gazprom guarantees that certain purchasing volumes throughout the term of the contract. In 2015, we signed a relevant long-term agreement.

During the year, we also won a number of large tenders held by Gazprom and shipped casing and tubing with TMK UP premium threaded connections. Some of TMK’s products were used in developing the Chayandinskoye gas field in Yakutia, which is destined to become a source of gas for the Power of Siberia pipeline currently under construction.

As part of Gazprom’s import substitution programme, the Russian division designed and supplied, specifically for its Astrakhan field, H2S resistant casing and tubing with ТМК UP PF and ТМК UP GF threaded connections capable of withstanding highly corrosive environments typical for this field. The connections offer enhanced resistance to high torsional, bending and tensile stresses and to thread galling, which is also important given the specifics of the field and its development.

In October 2015, TMK signed a memorandum on cooperation with Sakhalin Energy, under which the company may, after passing an agreed set of tests take part in tenders for the supply of casing and tubing with TMK UP threaded connections to be used in Sakhalin offshore projects.

In 2015, as part of Tatneft’s import substitution programme, we continued our shipments of high-tech casing pipe with TMK UP threaded connections for the Ashalchinskoye field in Tatarstan. These connections offer high compressive, tensile and bending strength, and are used to produce super-viscous oil with steam-assisted gravity drainage (SAGD), where a pair of parallel horizontal wells are drilled: one to inject steam into the formation to heat the oil viscosity, the other to pump out the oil. The shallow oil bearing formations at the Ashalchinskoye field make drift deviation impossible and directional drilling is used. All running operations for casing with TMK connections were supported by TMK NGS-Buzuluk’s representatives.

In 2015, TMK substantially boosted its sales of premium tubular products featuring the GreenWell dope-free technology to such Russian oil & gas majors as Rosneft, Bashneft, NOVATEK, Gazprom Neft and Lukoil. The technology requires no lubricant for coupling of casing and tubing pipe, considerably reducing the running preparation time and cutting overall costs of oil & gas producers for field development while minimising the environmental impact.

One of our business priorities is to deliver premium OCTG complete with related services. Our oilfield services include drill, tubing and casing pipe production and repairs, heat treatment, protective coating, production of a vast selection of pipe string components and downhole equipment, as well as pipe threading, pipe and pump rod service and repairs, etc.

The Russian oilfield services division is headed up by TMK Oilfield Services (Yekaterinburg) and includes the Orsky Machine Building Plant (Orsk), Truboplast (Yekaterinburg), TMK NGS-Buzuluk (Volga Federal District), TMK NGS-Nizhnevartovsk (Khanty-Mansi Autonomous Area). The latter two are located at the heart of oil & gas regions and provide well construction, repair and completion services to both large- and mid-size oil & gas companies and oilfield service providers.

TMK provides after-sales services to support all of its premium tubular products. TMK Oilfield Services division focuses on continuously improving the quality of its services by adopting new advanced equipment and solutions, and by exploring new segments in the oilfield services market.

To this end, in 2015 the division put in place a range of measures:

TMK NGS-Nizhnevartovsk commissioned a drilling pipe repair facility, launched a number of new technologies, including the rolling of drilling pipes with insulation coating and one-layer epoxy coating under thermally insulating and waterproofing coating. Jointly with RosNITI, the Company is working on ranking OCGT coatings by corrosion resistance and heat resistance.
TMK NGS-Buzuluk considerably enhanced its offering with engineering services for the running of casing and tubing with TMK UP premium threaded connections, and established a dedicated service centre within the company. In 2015, TMK NGS-Buzuluk provided engineering support for the running of 182 casing and tubing pipes in Russia and in other countries. In Russia, such support was provided at fields of Tatneft, NOVATEK, Vankorneft, Purneftegaz, Lukoil-Komi, Gazprom Dobycha Astrakhan, Gazprom Neft-Orenburg, Gazprom Neft-Khantos, etc. In other countries, our customers in 2015 included Zhaikmunai (Kazakhstan), Lukoil Uzbekistan Operating Company (Uzbekistan), Apsheron Operating Company (Azerbaijan), VICO (Indonesia) and others. We would specifically highlight engineering services provided by our teams for the running of casing at offshore platforms of JV Vietsovpetro
The Orsky Machine Building Plant revamped its production facilities and launched new technologies of tool joint production for drilling pipes.

We are also offering oilfield services in the US market. In particular, our OFS International offers well survey and casing supervising services, as well as pipe threading and production of couplings and downhole equipment. In 2015, the company further expanded its geographical coverage in all key oil & gas US regions and was engaged in five projects in Texas, Oklahoma and Ohio. OFS International considerably expanded its production capacity and is currently working with major US oil & gas and oilfield services companies.