The Russian JSC “Severstal” and the French industrial gas company Air Liquide have signed a general agreement on the establishment of joint venture intended for the generation of air separation gases.

The construction of the new air separation unit (ASU) will commence early in the third quarter of 2005 at the Severstal site in Cherepovets, the Russian company announced. The ASU is scheduled for commissioning in the first half of 2007.

Mr. Anatoly N.Kruchinin, Severstal General director, said: \\$quot;The decision on the establishment of the joint venture aimed at construction and joint operation of the new oxygen block was adopted within the framework of Severstal’s production build-up program.

“Air Liquide was chosen as the partner because the company had sufficient experience in construction and operation of these types of units and is well-known globally.”

Mr. Klaus Schmieder, a member of Air Liquide's Management Board, said: \\$quot;We are pleased with the start of our cooperation with Severstal, which is not only the leader of the Russian iron & steel industry, but is also a company well-known all over the world.”

The total investment in the ASU is about €100 million. In accordance with the agreement reached, Air Liquide’s share in the new joint venture will be 75 per cent accordingly, Severstal's share will be 25 per cent.

The unit will be designed and constructed at Severstal’s site and it will become the largest ASU in Russia and the most powerful installation for air separation in the iron and steel industry globally.

The daily output of the new facility will be 3 000 tons of oxygen. The unit will supply the steelworks with high-pressure oxygen as well as with high purity nitrogen and argon within the framework of the supply contract.

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