ArcelorMittal Kryvyi Rih taking Russian gas supplies via EU

Kryvyi Rih, the plant in Ukraine operated by the world’s largest steelmaker, ArcelorMittal, has started to take supplies of Russian gas from the European Union, the mill told Steel First on Monday October 27.

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This gas has flowed through the country already, as part of Russia’s supplies to the west. Russia cut off gas flows directly to Ukraine in mid-June this year, citing unpaid bills.

“Of course, gas is a big issue now, but we believe it will be resolved before the winter,” Paramjit Kahlon, ceo of ArcelorMittal Kryvyi Rih, told Steel First in an interview in late September.

Since October 1, Luxembourg-based ArcelorMittal Energy SA has started to supply gas from the EU via Slovakia to Ukraine.

However, the Ukrainian long steel maker “will not be able to fully meet its gas needs with the Slovakian reverse [supplies]”, the company said on October 27.

Kryvyi Rih purchases as much as 65 million cubic metres of gas per month. Only 3 million cu m of this total is made up by reverse supplies from Europe, however.

The plant’s key gas suppliers are “private gas companies in Ukraine”, Kryvyi Rih said, without giving further details.

Steel products output was not expected to be affected by the gas issue.

ArcelorMittal Kryvyi Rih produced 1.69 million tonnes of crude steel in the third quarter of 2014, which was its best quarterly output since 2008, the company said on October 13. “[We are] aiming for the same kind of volumes in the fourth quarter,” Kahlon said in the interview.

European energy commissioner Guenther Oettinger and Ukraine energy minister Yuri Prodan were scheduled to speak by phone on October 27 to prepare for trilateral talks with Russia on resolving a gas pricing row, Reuters news agency reported.

Metinvest, Ukraine’s largest steelmaker, “does not envisage a scenario when there will be significant disruptions of gas supplies from Russia”, cfo Aleksey Kutepov told Steel First in an interview on October 21.

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