Ukrainian pipe group Interpipe (Dnipropetrovsk) plans to organize production of pipes with ultra premium thread connections meeting CAL IV standards for use in the most demanding oil and gas production projects.

The pipe will be delivered to Shell for use in its projects in Ukraine.

The information is contained in a press release from the Industrial Policy Ministry based on its query to Interpipe concerning media reports that said Shell would not use Ukrainian-made pipe because none meets quality requirements.

Interpipe told the ministry that during the discussion of specific measures pursuant to its memorandum of cooperation with Shell, it consented to Shell's purchase of pipe with ultra premium thread connections meeting CAL IV standards from Japan's Sumitomo, since Interpipe was not currently making that product. However, under the terms of the memorandum, the need for the imports will disappear as soon as Interpipe starts up its own production.

"Interpipe is currently developing its own CAL IV premium connections. In order to raise the efficiency of production of the premium connections, a project to create high-tech production of pipe with ultra premium connections based at Interpipe Niko Tube was drawn up. The project is included among measures in the state program for stepping up economic development in 2013-2014," the ministry said in the press release.

Interpipe Niko Tube is one of Interpipe's five industrial assets. It specializes in production of seamless pipe for the oil and gas industry, special pipe for the engineering and power generation sectors, and general purpose pipe for industry. It has capacity to produce over 600,000 tonnes of pipe a year.

Interpipe is an international vertically integrated pipe and wheel company, which is among the world's ten largest producers of seamless pipes and is the third largest producer of all-rolled railway wheels in the world.

The company includes five industrial assets: Interpipe Nyzhniodniprovsky Pipe Rolling Plant, Interpipe Novomoskovy Pipe Plant, LLC Interpipe Niko-Tube, Dnipropetrovsk Vtormet and Dniprostal Steel Complex under the Interpipe Steel brand.

The end beneficiary in Interpipe is Ukrainian businessman Victor Pinchuk and members of his family.