Salzgitter JV Wins Steel Order From South Stream Gas Pipeline

German steelmaker Salzgitter AG (SZG.XE) said Wednesday its 50-50 joint venture Europipe GmbH has won a major order to supply steel pipes to the South Stream gas pipeline project, adding that the award will help improve capacity utilization at the presently loss-making steel pipes business.

Europipe will deliver some 450,000 metric tons of steel pipes for the Gazprom OAO (GAZP.RS)-led South Stream pipeline project, Salzgitter said.

The order will help lift capacity utilization at Europipe to "a satisfactory level" for about 12 months from the second quarter of 2013, the company said.

Europipe has been plagued by weak demand for its products and has been loss making.

Salzgitter owns 50% in Europipe. The remainder is owned by Dillinger Huettenwerke, in which ArcelorMittal owns a sizable stake.

The South Stream gas pipeline is controlled by Russian gas export monopoly Gazprom, which owns a 50% stake in the project. Italy's Eni SpA (E) holds 20%, and France's Electricite de France SA (EDF.FR) and Germany's Wintershall each own 15%.

Write to Jan Hromadko at [e-mail]

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