THE SGM GROUP OF COMPANIES

Transcription

1 THE SGM GROUP OF COMPANIES Stroygazmontazh Volgogradneftemash Krasnodargazstroy Spetsgazremstroy Lengazspetsstroy Volgogaz QUALITY RELIABILITY INNOVATION IN 2009 THE SGM GROUP OF COMPANIES FORMED A HOLDING COMPANY UNITING CONSTRUCTION-ASSEMBLY AND MANUFACTURING COMPANIES WITH HISTORIES OF OVER 50 YEARS. BUSINESSES WITHIN THE HOLDING COMPANY POSSESS EXTENSIVE EXPERIENCE DEVELOPING OIL AND GAS FIELDS, CONSTRUCTING PIPELINES AND INDUSTRIAL FACILITIES, ESTABLISHING GAS DISTRIBUTION NETWORKS, AND MANUFACTURING EQUIPMENT FOR THE OIL AND GAS INDUSTRY. THE LEADING ENTERPRISE IN THE HOLDING COMPANY IS STROYGAZMONTAZH LIMITED LIABILITY COMPANY. GEOGRAPHICALLY, THE PROJECTS BEING DEVELOPED BY THE GROUP SPAN THE ENTIRE RUSSIAN FEDERATION AND INCLUDE FOREIGN COUNTRIES. WE PROVIDE OUR CUSTOMERS AMONG WHOM ARE THE LARGEST BUSINESSES IN THE OIL AND GAS INDUSTRY IN RUSSIA, EUROPE, AND ASIA WITH SERVICES USING A COMPREHENSIVE APPROACH THAT INCLUDES ENGINEERING, PROCUREMENT, AND CONSTRUCTION.

2 MISSION STATISTICS FROM THE SGM GROUP OF COMPANIES WE DEVELOP LARGE-SCALE OIL-AND-GAS CONSTRUCTION PROJECTS IN RUSSIA AND ABROAD. OUR WORK CONTRIBUTES TO THE DEVELOPMENT OF FUEL AND ENERGY INDUSTRY AND PROMOTES A HIGHER LEVEL OF PROSPERITY IN THE SOCIETY. In 2008 the SGM group of companies' income was Net assets at yearend 2008 exceeded billion US dollars billion US dollars KEY AREAS OF ACTIVITY ENGINEERING PROCUREMENT CONSTRUCTION REPAIR, RECONSTRUCTION, AND TECHNOLOGICAL REFITTING The SGM group employed more than 11, 000 people DEVELOPMENT OF GAS DISTRIBUTION NETWORKS PROJECT MANAGEMENT PRODUCTION OF EQUIPMENT FOR THE OIL AND GAS INDUSTRY Our automobile and heavy construction equipment fleet held more than 2, 600 vehicles The SGM group of companies has earned its fine reputation by sticking to the following principles: adherence to international standards of quality for construction and manufacturing and a proprietary system for assessment and control of the quality of work in process Informational openness and transparency in its business activiti Financial responsibility before its customers professionalism of its personnel and a training program for skills enhancement Strict compliance with all industrial safety rules Policies for protecting the environment and the health and saftety of employees (HSE policies) By yearend the SGM group had constructed over 30, 000 kilometers of pipelines 2 3

3 ENGINEERING License E ГС (Local license) Vladimir Belyakov General Director Lengazspetsstroy ENGINEERING A BRIDGE TO THE FUTURE The introduction of engineering services has enabled us to achieve greater investment effectiveness, reduce time to perform work and costs of production, lower investment risk, and raise our competitiveness in domestic and foreign markets. SGM provides a variety of engineering services, making it possible to develop ready-to-operate (turnkey) oil and gas projects. The group renders the entire complex of engineeringconsulting services to prepare and execute the construction of facilities and ensure production processes. It also services installations, operates businesses, and market products. The group provides the following engineering services: Design engineering Analyses prior to investment; development of financial feasibility studies; preparation and coordination of permit, design, and tender documentation; expert review of project documentation developed by outsourced organizations; technical and economic project substantiation; organization of product design personnel activities Technical engineering Development and expert review of construction and operating technology together with essential documentation facilitating their application, technical designs, production engineering, and formulation of specifications for customized production equipment Financial engineering Calculation of budgets and cost estimates for projects, financial instruments, and operational designs Production engineering Preparation of technical documentation and specifications, preparation for production and organization of work, supervision of deliveries and production oversight, quality management Khabarovsk, Krasnyi Styk July 31,

4 PROCUREMENT Yaroslav Soga Director Construction Department Stroygazmontazh PROCUREMENT AN INSTRUMENT TO OPTIMIZE EXPENSES We place orders for construction objects in the oil and gas industry, for preparation and realization of projects, and for optimization of control over purchases. In cooperation with a large number of manufacturers of equipment and materials at home and abroad, we employ the most advanced technologies in logistics services. Our strengths established relations with various/numerous partners, a wide assortment of products, a system of acquisitions that runs smoothly. Stroygazmontazh handles purchase and delivery of equipment and material for oil and gas construction. In 2008 Stroygazmontazh procured more that 1.3 billion rubles worth market studies, purchase analyses, and conduct of tenders for the supply of goods or the provision of services (including government purchases) Preparation of tender packets and competition documentation The SGM group collaborates successfully with Russian and foreign partners to furnish products, materials, equipment, and other goods to meet the needs of its customers. Its qualified personnel possess the required experience to prepare contracts for the purchase and delivery of equipment to any country of the world, as well as being competent in matters of credit, financing, banking, and customs operations. of goods and products. During the first half of 2009, the SGM group of companies acquired construction materials whose value alone exceeded 10 billion rubles. The complex of procurement services offered by the SGM group includes: Configuration of packaged sets, including development of detailed recommendations to improve logistics and other production designs organizational and consulting support for purchases or performance of work, expediting services, verification that have been contract terms fulfilled Thanks to its proprietary production bases in geographically advantageous locations with access to ports on the Black, White, and Baltic seas the SGM group is able to deliver goods to any destination on the globe. Today our strategic partners include Gazprom and large oil and gas companies operating in Russia and in foreign countries: Aleksinsky Heavy Industrial Fittings Plant, Penztyazhpromarmatura, Samaravolgomash, Zavod Zhelezobetonnykh Izdeliy, Uraltrubostal, Beguschiy, Vyksa Steel Works, ChTPZ-KTS, United Metallurgical Company, Yuniteksgazinvest, Dzerzhinskkhimmash, Penzkhimmash, Chelyabinsk Zavod Metallokonstruktsiy, Korvet, Ikar, Kurgankhimmash, ABB Lummus Global (USA), ENEX (Switzerland), ESAB (Sweden), Industil Arcelor Group (France), JGC Corporation (Japan), John Brown (Great Britain), Litwin (France), PALL GmbH (Germany). Volgogradneftemash, which has its own terminal on the Volga River, collaborates closely with a number of leading Russian oil and gas companies, including: Nizhnekamsk Oil Refinery and Nizhnekamskneftekhim (Nizhnekamsk), Kazanorgsintez (Kazan), Mozyr Oil Refinery (Mozyr), NAFTAN (Novopolotsk), Kuibyshev Oil Refinery (Samara), Novokuibyshev Oil Refinery (Novokuibeshevsk), Syzransk Oil Refinery (Syzransk), Ryzan Oil Refining Company (Ryazan), LUKOIL-Volgogradneftepererabotka (Volgograd), LUKOIL-Permnefteorgsintez (Perm), LUKOIL-Ukhtaneftepererabotka (Ukhta), Kirishinefteorgsintez (Kirishi), and Gazprom enterprises. Throughout its long history, Volgogradneftemash has worked with foreign partners for the acquisition and delivery of goods for foreign markets and the purchase of equipment and materials. 6 7

5 CONSTRUCTION Certificate ISO Andrei Andreev General Director Krasnodargazstroy GLOBAL STANDARDS OF QUALITY The SGM group is engaged in infrastructure building for oil and gas facilities, development of oil and gas fields, laying of gas pipelines in different geographic zones under widely varying climatic conditions in hard-to-reach regions, and construction of crossings to overcome natural and artificial barriers. We guarantee high-quality and timely fulfillment of construction-assembly work. The SGM group of companies is also engaged in civil construction. In that area, its infrastructure work includes: Buildings and facilities in first and second categories of complexity Transportation infrastructure: motor roads, railroads, bridges, overhead passages, and traffic interchanges The intellectual, productional, and technical capabilities of the SGM group make it possible to develop pipeline construction projects of any complexity in various climatic zones. These activities are supported by licenses. Lengazspetsstroy, for example, holds all state licenses and certificates of compliance with international and Russian standards of quality and environmental safety, GOST R ISO and GOST R ISO The group s specialist have taken part in a lot of gas pipeline, construction projects, among them: Sovetobad-Shatlyk-Khiva, Yamal-Europe, Serpukhov-Leningrad, Gryazovets-Leningrad, Urengoy-Pomary-Uzhgorod, Urengoy-Tsentr, Leningrad-Vyborg- Gosgranitsa, Russia-Turkey, Central Asia-Center, Pochinki-Izoblilnoye-Severo-Stavropolskoye, SRTO-Torzhok, and the North European Gas Pipeline. They built oil pipelines Druzhba, Surgut-Novopolotsk, Mangyshlak-Kuibyshev, Kirishi-Primorsk, Talakan-Vitim, and others. They also built the Volgograd compressor station (Pochinki-Izobilnoye-Severo-Stavropolskoye gas pipeline underground storage area), the Novopetrovsk compressor station (Pochinki-Izobilnoye-Severo-Stavropolskoye gas pipeline underground storage area on the Petrovsk-Frolovo-Izobilnoye section), the Olkhovsk compressor station, (Pochinki- Izobilnoye-Severo-Stavropolskoye gas pipeline underground storage area) and reconstructed the Zamyany compressor station (Makat-North Caucasus gas pipeline), the Torzhok compressor station (Yamal-Europe gas pipeline), the Krasnoznamensk compressor station (Minsk-Vilnius-Kaunas-Kaliningrad gas pipeline). Up-to-date material resources and technical capabilities and the accumulated experience of highly qualified technicians and engineering personnel make it possible for the SGM group of companies to carry out the full complex of construction projects in the oil and gas industry: Development of oil and gas fields (wells) Construction of linear pipelines: >> Main pipelines with diameters of up to 1,400 millimeters (56 inches) >> Industrial pipelines Construction of onshore pipeline facilities: >> Compressor stations > > Underground gas storages >> Gas distribution stations >> Gas processing facilities >> Access roads, buildings and structures to support linear construction, helicopter pads, and other facilities 8

6 REPAIR, RECONSTRUCTION, AND TECHNOLOGICAL REFITTING Sergei Garaev General Director Spetsgazremstroy Certificate ISO 14001:2004 TIMELY REPAIRS A PLEDGE OF COST EFFECTIVENESS AND SAFETY Repair and maintenance of oil and gas facilities constitutes a significant amount of capital investment. The importance and need for this work derive from the fact that timely capital repairs reduce the deterioration of gas pipelines, which limits the volume of gas to be transported. The sequenced-flow method that we use for reconstruction work from incoming inspection of pipe, equipment, and materials to puttingin into operation enables us to overcome all complexities. Preventive maintenance and capital repairs play an important role in pipeline operation; they reduce loss and emergency risk. The SGM group possesses the technology and resour- ces to carry out timely repairs and reconstruction, thus ensuring the reliability and environmental safety of its oil and gas facilities. Well-timed preventive measures, reconstruction, and repair of pipelines are important resource-saving activities. Loss of worn pipe during operation is often associated with development of new hydrocarbon fields. Specialists from the SGM group of companies execute repair work using several process flow options: Option 1 Remove the pipeline section from operation excavate the trench cut out the segment from the pipeline lift the segment to the shoulder tie in the repaired and reconditioned section and replace the coating. Option 2 Remove the pipeline section from operation excavate the trench conduct work in the trench or on the shoulder without cutting out the segment. Option 3 Conduct work in the trench on an active pipeline whose pressure has been reduced in advance. When carrying out coating of new pipe in the field, we use polymer-bitumen tape based on mastic compound Transkor-GAZ Litkor-NK-GAZ and fiberglass mesh SST-B. In comparison with other coating materials in the asphalt-bitumen class, these tapes are distinguished by a high level of anticorrosive protection, versatility, and are significantly less hazardous to the health of workers and the environment. 11

7 DEVELOPMENT OF GAS DISTRIBUTION NETWORKS Certificate OHSAS 18001:1999 Sergei Borsch General Director Volgogaz PARTNERSHIP WITH US A STEP INTO TOMORROW A cozy hearthside is a basic value shared by all mankind. We have safeguarded our dwellings from man s earliest days. Our homes will be treasured by our children and theirs. The SGM group is proud to have been chosen to develop gas distribution networks for the regions of the Russian Federation. We are proud to have brought warmth to so many homes this is also a result of our hard work. By bringing gas to remote settlements, we satisfy the simplest and, at the same time, vital human dreams. Companies in the SGM group participate in implementing the federal Program to Build Gas Networks for Regions of the Russian Federation. We are leading construction for regional gas distribution capacity, building gas pipelines between settlements, gas distribution stations, and the infrastructure to make the new systems work. Objects are being built in the field, overcoming obstacles that include railroads and motorways, utilities, mountainous terrains, and water barriers. By the end of 2008, we had already constructed networks of more than 2,500 kilometers of gas pipeline; in 2009, we plan to add more than 1,400 kilometers of pipeline. Anadyr Murmansk Kaliningrad Pskov St. Petersburg Petrozavodsk Veliky Novgorod Arkhangelsk Naryan-Mar Smolensk Tver Vologda Palana Bryansk Kaluga Moscow Yaroslavl Kostroma Ivanovo Oryol Tula Vladimir Syktyvkar Kursk Ryazan Nizhny Novgorod Lipetsk Kirov Belgorod Ioshkar-Ola Voronezh Kudymkar Tambov Saransk Cheboksary Penza Izhevsk Kazan Perm Salekhard Dudinka Magadan Petropavlovsk-Kamchatsky Krasnodar Maikop Rostov-na-Donu Volgograd Saratov Ulyanovsk Samara Ufa Yekaterinburg Surgut Tura Yakutsk Stavropol Elista Cherkessk Nalchik Astrakhan Vladikavkaz Magas Grozny Makhachkala Orenburg Chelyabinsk Kurgan Tyumen Omsk Tomsk Novosibirsk Kemerovo Krasnoyark Barnaul Abakan Ust-Ordynskiy Blagoveschensk Birobidzhan Khabarovsk Yuzhno-Sakhalinsk Gorno-Altaisk Kyzyl Irkutsk Ulan-Ude Chita Aginskoe Vladivostok Regions of the Russian Federation where SGM is expanding gas delivery (46 regions as of 2009) Other regions 13

8 PROJECT MANAGEMENT Mikhail Olkhovtsev Director of Project Management Stroygazmontazh Certificate ISO 9000 SOLUTIONS FOR COMPLEX CHALLENGES Persistent demand for energy causes an increase in the complexity of projects in the oil and gas industry. There are so many projects today each with its various partners, subcontractors, and vendors, each of whom has its own planning system. Specialists at Stroygazmontazh see construction as an indivisible whole. Applying a unique combination of theoretical knowledge and practical experience, our team is able to draw up a plan for the most complex projects, forecast and prevent possible problems, and complete work according to the designed schedule. Thus, we guarantee our clients an ever-increasing qualiti of our services. Stroygazmontazh has garnered unique experience in professional management of projects. The know-how it has acquired has enabled it to draw together and coordinate all areas of the group s activity to achieve planned results. Practical experience conducting complicated technical work in Russia and abroad, as well as an understanding of international project management standards, guarantees our customers that projects will be completed on time, per budget, and at the desired level of quality. Management of engineering, supplies, and construction as a single project, known as EPCM (Engineering, Procurement, Construction Management), significantly improves the achievement of goals and objects. This approach has been successfully applied in companies of the SGM group. Intensive application of EPCM when implementing construction projects is one of the group s priorities. Professional project management ensures a continuum of direction, work carried out at a guaranteed level of quality, time saving, and overheads reduction. Collaboration with the SGM group under an EPCM contract brings a number of significant advantages. Foremost, the group accepts all risks of construction from design engineering to the moment the object is delivered to the customer, including execution of warranted obligations. The agreement for EPCM services is executed at a fixed price, permitting the customer to reduce risks in a market of constant change with its unstable rates. The project s clearly organized structure, unambiguous distribution of authority and responsibility among project participants, and use of internal project management standards guarantee high quality outcomes

9 PRODUCTION OF EQUIPMENT FOR THE OIL AND GAS INDUSTRY Alexander Lazerev General Director Volgogradneftemash Certificate ISO 9001:2000 PART OF THE HISTORY OF OUR COUNTRY S INDUSTRIAL BREAKTHROUGHS Volgogradneftemash is Russia s largest producer of processing equipment for the oil, gas, and petrochemical sectors. Throughout its 65-year history, the company has supplied materials and equipment to domestic and foreign markets. Equipment manufactured at Volgogradneftemash is found today at virtually all domestic gas processing and oil refining plants, along the longest main gas pipelines, and at gas condensate and oil fields in Russia and countries of the CIS. Factory/ production equipment is in use in over 30 countries worldwide. In April 2009, Volgogradneftemash executed Russia s first out-of-furnace, horizontal heat treatment of vacuum columns. The two-layer steel column weighs 336 tons and is 43 meters long. The intellectual and technical potential of the company, its modern manufacturing, and the proprietary terminal on the Volga River make it possible for Volgogradneftemash to deliver large-sized, assembly-ready apparatuses built to the latest quality standards. In cooperation with specialists from research and development, and design and construction institutes, the plant introduces the latest technologies and issues new types of products. Volgogradneftemash is currently executing a long-term program of technical development for all primary lines of work. This program will enable the business to reach new levels of organization and technology. Volgogradneftemash holds all licenses and permits from Russian Federal Service for environmental, technological and atomic supervision that are required for use of its products at chemical, petrochemical, oil refining, and other hazardous facilities. Personnel at the factory are competent in all issues of production and contract preparation and can ensure delivery of equipment to any country in the world. The plant s main products are equipment working under pressure reactors, coke furnaces, separators, absorbers, adsorbers, desorbers, columns and towers, tanks, receivers, dust arrestors, heat exchangers of various modifications, and similar items. A large part of the equipment we manufacture is supplied for block-complex use. Volgogradneftemash produces a series of equipment for main gas pipelines ball valves, reverse flaps, control valves, axisymmetrical valves, and pigs and smart pigs. For many years, the company has been a leader in the manufacture of centrifugal pumps for use in processing units to transmit oil products and liquefied petroleum gases. Production Capacity Cutting preparation Machine work Shipment of goods Foundry operations Assembly Welding Heat treatment 17

10 CURRENT PROJECTS FROM VYBORG TO VLADIVOSTOK THE SGM GROUP OF COMPANIES IS TAKING PART IN IMPLEMENTING GAZPROM'S ENERGY INVESTMENT PROGRAMS: DEVELOPMENT OF THE ENERGY RESOURCE BASE, INFRASTRUCTURE DEVELOPMENT, AND TRANSPORTATION CONSTRUCTION. THESE PROGRAMS ARE ESSENTIAL TO THE COUNTRY S ECONOMIC PROGRESS, THE COMFORT OF THE LIVES OF RUSSIA S CITIZENS, AND THE STABLE SUPPLY OF ENERGY TO EUROPE AND ASIA. SGM GENERAL CONTRACTOR FOR THE FOLLOWING PROJECTS: Construction of sections of the Nord Stream gas pipeline The Nord Stream gas pipeline links Russia s United Gas Supply System with the European Gas Network. It offers the greatest reliability for the provision of blue fuel to consumers in Western Europe and northwestern regions of the Russian Federation. The program s implementation began in 2005 and the first line of the network is to be commissioned in Construction of sections of the Pochinki- Gryazovets gas pipeline The Pochinki-Gryazovets gas pipeline will be a bridge between systems in the central and northern (Nord Stream) corridors; its operation will contribute to the resolution of important tasks in gas transportation in the future. Construction work will increase the gas transmission capacity of the Pochinki-Gryazovets gas pipeline, expand the amount of gas transmitted, and satisfy growing consumer demands in central regions of Russia. Moreover, the pipeline will stimulate the growth in existing businesses and the creation of new industrial endeavors. Project implementation began in 2007 and is expected to be completed at the end of Expansion of the Yamsoveisk gas condensate field (the Yareisk site) The Yamsoveisk field, discovered in 1970, is part of the Western Siberian Oil and Gas region. The field s initial reserves were estimated at 436 billion cubic meters of gas. During the development phase, six operating wells will be drilled and outfitted with telemechanics to transmit information to the gas processing complex. Gas will be transported to the pipeline via a 400-millimeter (16 inch) loop-circuit collector from clusters of 250 millimeters (10 inches) in diameter. All gas pipeline-loop circuits will be laid underground. Commissioning is planned for Construction of sections of the Dzhubga- Lazarevskoe-Sochi gas pipeline This gas pipeline will be connected to the active intercontinental pipeline Russia-Turkey in the Gorskiy Tuapsinsky region. The Dzhubga-Lazarevskoe-Sochi pipeline will transport 3.8 billion cubic meters of natural gas annually. Its srartup is scheduled for Construction of sections of the Sakhalin- Khabarovsk-Vladivostok gas pipeline The Sakhalin-Khabarovsk-Vladivostok gas transportation system will serve the majority of consumers in the Khabarovsk and Primorsk regions, Sakhalin Oblast, and the Evreisk Autonomous Oblast. Full development of the system will permit transmission of 35 billion to 37 billion cubic meters of gas per year, while annual gas consumption in the Far Eastern Federal Okrug is forecasted at around 20 billion cubic meters. Therefore, part of the gas is expected to be directed for export to countries of the Asia Pacific Region. Exported gas will be drawn from reserves on the Sakhalin shelf

11 TECHNOLOGY MULTIPLYING EXPERIENCE INTRODUCING INNOVATION CONSTRUCTION OF WATER BARRIER, ROAD, AND RAILWAY CROSSINGS The SGM group of companies works continuously on re-equipment and mastery and introduction of new technologies for construction Construction of the pipeline area Preparation of the construction area for the linear part of pipelines of varying diameter is one aspect of general preparations for construction. The company uses rotary chippers to clear the forest belt. Groundwork Modern excavating equipment facilitates high performance and, as a consequence, rapid construction of pipelines. Pipe laying is used for open earth and trench-free technology. The principles of minimizing damage to the environment are always strictly followed. When developing the trench in rocky terrain, companies in the SGM group conduct drilling and blasting operations. of linear parts and subsurface objects for main pipelines. Automatic and mechanical welding Automatic one-sided welding with solid cross-section wire using a CWS.02EM protective gas complex is used for nonrotational welding and pipe sections in gas pipeline branches, when rapid production and high-quality weldingassembly work are required simultaneously. Excellent results are achieved with the help of semi-automatic welding using Innershield powdered wire in a protective gas environment. The same applies to power-operated welding using Tekhnotron powdered wire, STT method. In compliance with the new Gazprom normative documents for welding, the SGM group of companies is broadly introducing Miller equipment for inductive heating. Horizontal directional drilling Horizontal directional drilling is used in gas pipeline construction to cross water barriers in cramped areas, along developed riverbanks, near existing pipeline passages, and in natural preserved and closed areas that require special environmental protection while work is being carried out. The construction of crossings for gas pipelines using horizontal directional drilling may be accomplished with various process flow diagrams. The most frequently applied one involves drilling a pilot hole that is subsequently reamed and through which the product pipe, previously assembled on the opposite bank, is pulled (figure 1). The flow diagram for construction of each passage is specified in the operations plan, developed after the analysis of the natural factors to be encountered. Microtunneling Microtunneling is a method for driving the pipe under adverse engineering-geological conditions. Microtunneling technology (figure 2) is distinguished by the precision of its drive and the continuous control of its path. Using this technology, communications can be laid in the most complex environments. Advantages of microtunneling: Work to lay collectors is executed without disturbing the surface, preserving existing infrastructure and reducing construction costs by lowering man-hours required and eliminating heavy excavating equipment. Work can be executed in water-encroached and unstable subsoil without additional measures (water reduction, freezing etc.) to solidify the soil. fast pace of penetration (up to 200 meters per month). Minimal impact on the environment. Figure 1 Horizontal directional drilling method Figure 2 Microtuneling method

12 QUALITY CONTROL OF WORK IN PROCESS Galina Karpenko Quality Control Service Director Stroygazmontazh Certificate ISO 9001:2000 APPLYING THE WORLD S BEST At all SGM group construction sites, specialists from the Quality Control Service work to ensure that technology is applied in compliance with the latest requirements. For example, in coating welded joints, automatic welding methods are used to the greatest extent possible; in pipe assembly, we use joint connections and spare parts of higher technological preparedness; in applying modern protective measures against corrosion and external stress, we conduct full testing for durability and structural integrity before start-up. The SGM group s Quality Assurance program has been awarded a certificate of compliance with STO Gazprom Our unified Quality Control Service guarantees the quality of work we carry out at all stages of project implementation. The 125 specialists in the QA service are in charge of: Upgrading systems for production control, including laboratory, entry, step-by-step, and inspection controls; supervision of quality control offices at the group's enterprises organizing and performing activities to ensure compliance with the requirements in normative documents and project designs analyzing construction technology and equipment to choose the most progressive Raising personnel qualification The QA service uses automated ultrasonic defectoscopes in its control of the quality of welded joints, nonmembranous complexes for radiological defectoscopes, and other equipment. In addition, specialists in the Quality Control Service have designed a rating system to evaluate the quality of work performed by subcontracting organizations. 22

13 TECHNICAL EQUIPMENT OWNED BY THE STROYGAZMONTAZH GROUP OF COMPANIES Heavy equipment (bulldozers, pipe-layers, excavators)* 651 units Welding complexes** 244 units Automobiles and special-purpose vehicles 1523 units Other technical equipment 233 units * Including Komatsu, Caterpillar, Hitachi ** Including CWS and CRC-EVANS complexes The powerful technical capabilities of the SGM group play an important role in ensuring that work is executed at a high level of quality. The group possesses the latest equipment, and its fleet is continually broadened and upgraded. Specialized equipment in sufficient number allows us to execute the most challenging projects within tight schedules and to surmount any topographical difficulty. 25

14 social policies SPECIALISTS IN THE STROYGAZMONTAZH GROUP OF COMPANIES Svetlana Krinitskaya Director of Human Resources Stroygazmontazh PEOPLE OUR WEALTH The many-thousand-member collective of the SGM group of companies possesses enormous intellectual, industrial, and technological potential. The group s workforce is its most precious and meaningful resource, enabling us to implement projects in pipeline construction at any level of complexity. Therefore, today, under the difficult conditions of crisis, we are trying even harder to support a high level of motivation among personnel, to strengthen corporate spirit, and reinforce our team s integrity. Over including: 11,000 employees Companies in the SGM group follow a uniform program of corporate social responsibility to their employees and the public as a whole. 837 administrative and management personnel EVERY NEW PROJECT UNDERTAKEN BY THE SGM GROUP OF COMPANIES IS THE WORK OF A HUGE COLLECTIVE. ENTERING THE REGIONS, COMPANIES OF THE GROUP DO NOT ONLY CARRY OUT CONSTRUCTION AND SUPPLY RESIDENTIAL AREAS WITH GAS; THEY CREATE NEW WORKPLACES. SOCIAL POLICIES OF THE SGM GROUP ARE CONDUCTED IN ACCORDANCE WITH ITS MISSION AND VALUES AND ARE IN HARMONY WITH THE SOCIAL POLICIES OF THE REGIONS WHERE SGM IS PRESENT. 2,070 engineeringtechnical employees 125 specialists in quality control Our highly qualified group of professionals is the driving force in SGM s business. More than 11,000 people work in companies of the SGM group. Many of our specialists have accumulated 30 years of experience in the oil and gas industry. As our older set, they enthusiastically share their knowledge with younger colleagues. Employees of the group work as a single team with an approach that is clear and understandable to everyone: carry out work well, strictly fulfill responsibilities to the customer, take satisfaction from one s labor, bring profit to the group, and, as a result, provide for the well-being of one s family and for its confidence in the future. 8,165 skilled workers 26 27

15 HEALTH, SAFETY, ENVIRONMENT HSE A CORPORATE RESPONSIBILITY The SGM group of companies pays considerable attention to ensuring worker safety, health maintenance, and environmental protection. Senior management regards the life and health of all workers as an inviolable priority. Therefore, guaranteeing safety and preventing accidents and personal injuries always takes precedence over the interests and term of any stage of work. We believe that every employee has the right to expect safe working conditions, where his or her health will be protected and causes of trauma and other injury will be eliminated. The SGM group of companies takes upon itself the fulfillment of the following goals in the area of health, occupational safety, and environmental protection: To safeguard the health of employees of the SGM group of companies and people residing in regions where the group carries out its work to improve occupational and environmental safety by conducting safe, accident-free operation of machinery, mechanisms, and technological equipment to employ in the activities of the SGM group accepted principles of health, occupational safety, accident prevention, and environmental protection, complying with national legislation, programs for worker safety, and agreements with labor groups to reduce negative impact on the environment by making industrial facilities more environmentally secure and by minimizing emissions, pollution, and production waste to use technology, modern machinery, and mechanisms that save in the consumption of materials and energy resources; to reclaim resources and recover waste to adopt management decisions based on multiple scenarios of development that take into account environmental priorities to promote the interaction of leading specialists in the SGM group with all interested parties to increase the effectiveness of measures for health, occupational safety, and environmental protection to engage employees in a meaningful participation in all elements of the system for management of health maintenance and occupational safety Companies of the group are guided by operational technology policies that simultaneously protect the health and well-being of employees and promote effective working processes. Systems of occupational safety, health maintenance, and environmental protection meet widely accepted Russian and international standards and take into account the requirements that our individual customers present. When working abroad, the SGM group adds to its usual HSE policies and procedures the foreign government s particular requirements for worker safety, health maintenance, and environmental protection. Environmental security as a standard Construction of such complex facilities as gas pipelines and compressor stations is unthinkable without strict compliance wiht production techniques and special control to assure environmental protection. For us, environmental friendliness is not simply a tribute to what is in fashion it is a corporate principle and a requirement for production. Krasnodargazstroy is the only Russian construction company today whose management systems comply with the three primary international standards in this area: ISO 9001, ISO 14001, and OHSAS