Europipe, OMK and Sumitomo Corp. (8053.TO) have been awarded the EUR1 billion contract to supply 1 million metric tons of steel pipes for the second leg of the Nord Stream gas pipeline from Russia to Germany, Nord Stream said Friday.
Europipe, which is 50% owned by Salzgitter AG (SZG.XE), will supply 65% of the pipe, Russian pipe company OMK will provide 25% and Japan's Sumitomo 10%, the pipeline consortium said in a statement.
The 1,220-kilometer second leg of the pipeline will run under the Baltic from Vyborg in Russia to Lubmin in Germany. The first leg was tendered in 2007 and is scheduled to begin operating in 2011.
The pipeline is the central plank of Russia's strategy to reduce political risk to its gas supplies by bypassing transit countries in Eastern Europe. Russian gas supplies to Europe have in the past been disrupted by disputes with transit countries Belarus and Ukraine.
Nord Stream is a joint venture between Russian gas monopoly OAO Gazprom, BASF SE (BAS.XE) subsidiary Wintershall, German utility E.ON AG (EOAN.XE) and Dutch gas network operator Nederlandse Gasunie NV.