USSR: PROSPECTS FOR REDUCED IMPORTS OF LARGE-DIAMETER PIPE

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP84T00926R000200020004-7
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 22
• Document Creation Date: December 22, 2016
• Document Release Date: August 3, 2011
• Sequence Number: 4
• Publication Date: November 1, 1983
• Content Type: REPORT

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Directorate of
Intelligence
USSR:
Prospects for Reduced Imports
of Large-Diameter Pipe
SOV 83-10190
IA 83-10119
November 1983
Copy 4 2 0
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Directorate of
Intelligence
USSR:
Prospects for Reduced Imports
of Large-Diameter Pipe
A Research Paper
This paper was prepared by
nf the, Office, of Snyiet Ann] , and
SOYA. Comments and queries are welcome and may
be addressed to the Chief, Soviet Economy
Division, SOVA
Secret
SOV 83-10190
IA 83-10119
November 1983
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USSR:
Prospects for Reduced Imports
of Large-Diameter Pipe F__]
Key Judgments
Information available
as of I September 1983
was used in this report.
Since the early 1960s imported large-diameter (1,020- to 1,420-mm) pipe
has played a key role in Soviet construction of oil and gas pipelines. Many
projects now under way, including the Siberia-to-Western Europe gas-
export pipeline, rely almost exclusively on imported 1,420-mm pipe
1,420-mm gas pipelines.
During 1981-85 we project that the Soviets will import about 2.2 million 25X1
tons of 1,420-mm pipe annually. In addition; domestic 1,420-mm pipe
production (about 400,000 tons per year) will depend on imports of high-
strength, low-alloy (HSLA) steel plate. Thus, at least through 1985, the
USSR will be almost totally dependent on the West for an annual average
of 2.6 million tons of 1,420-mm pipe and steel plate suitable for use in
Some time after 1985, however, and probably no later than 1990, the
USSR will be able to cut back on its imports of 1,420-mm pipe. It will need
less foreign pipe because of a likely slowdown in the pace of construction of
domestic oil and gas pipelines during 1986-90 and an increase in domestic
capacity for manufacturing 1,420-mm pipe using a process that does not
require high-quality steel plate.
Our analysis indicates that, barring unexpected additions to the gas
pipeline construction program, annual Soviet requirements for 1,420-mm
pipe for gas pipeline construction will drop from 2.6 million tons during
1981-85 to about 1.8 million tons during 1986-90. At the same time, we be-
lieve that Soviet production of 1,420-mm pipe suitable for use in gas
pipelines may rise by roughly 900,000 tons to 1.3 million tons annually
during 1986-90. The startup and expansion of output at a new pipe mill at
Vyksa (near Moscow) should add some 500,000 tons to Soviet capacity for
production of 1,420-mm pipe. In addition, capacity available for 1,420-mm
pipe production at Khartsyzsk (in the Ukraine) will increase from 400,000
tons in 1982 to as much as 800,000 tons by the end of the decade.
At Vyksa the Soviets already have started production of 1,420-mm
multilayered pipe. This pipe does not require HSLA steel plate and is
capable of operating at 75 atmospheres (about 1,102 pounds per square
inch) of pressure. Soviet production technology is far behind state-of-the-
art single-walled pipe-the technique used exclusively in the West. The
increased metal, energy, and welding requirements of Soviet technology
would make the process prohibitively expensive in the West. Nevertheless,
iii Secret
SOV 83-10190
IA 83-10119
November 1983
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US metallurgical experts are convinced that the Soviet pipe will work as
planned. We believe that the Soviet commitment to manufacture 1,420-
mm pipe despite the high costs involved reflects Moscow's ongoing concern
about possible vulnerability to Western sanctions and a desire to conserve
hard currency.
Pipe production at the Khartsyzsk mill, however, will require HSLA plate.
Although the Soviets are currently building a rolling mill-which may be
operational in 1985 or 1986-to provide HSLA steel plate for the pipe
plant, the Soviet track record indicates that the Soviets will, at best, slowly
develop a capability to produce HSLA steel plate for civilian consumers
during 1986-90.
Thus, with Moscow's requirements for 1,420-mm pipe projected at 1.8
million tons annually during 1986-90 and domestic production increasing
to as much as 1.3 million tons during this period, imports of 1,420-mm pipe
could decline by 1.7 million tons while imports of less expensive steel plate
increase by 400,000 tons. We estimate that annual Soviet expenditures for
1,420-mm pipe and HSLA plate for manufacture of pipe could fall during
1986-90 to as little as $500 million compared with $1.3 billion during
1981-85. In a best case scenario from the Soviet viewpoint, if development
of HSLA steel plate proceeds smoothly to support 1,420-mm pipe produc-
tion at the Khartsyzsk mill, imports of steel plate could decline to
negligible levels
A substantial drop in Soviet imports of 1,420-mm pipe would most affect
Japan and West Germany-the USSR's largest suppliers. Increased Soviet
output of 1,420-mm pipe, however, will be phased in over a period of
several years, giving Western suppliers some breathing room. The Soviets
also would want to avoid the political consequences that would result from
any sharp unexpected cuts in orders placed in countries with which the
USSR is trying to improve political ties
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Key Judgments
Background
The Role of Imports
1
Requirements Versus Production Capacity
3
Pipe Requirements During 1981-85
3
Pipe Requirements During 1986-90
4
Soviet Production Capacity During 1986-90
6
Implications
8
Hard Currency Impact
9
Impact on Western Suppliers
9
A. Methodology for Estimating Requirements for Soviet Gas Pipeline
Construction, 1986-90
11
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USSR:
Prospects for Reduced Imports
of Large-Diameter Pip
The bulk of the Soviet Union's petroleum resources
are located in remote areas of Western Siberia. To
transport oil and gas' from these areas to the western
industrial regions of the country, the Soviets laid more
than 90,000 km of large-diameter oil and gas trans-
mission pipelines by the end of 1982.' Large-diameter
pipelines transport oil and gas much more efficiently
than smaller diameter pipelines and have played an
important role in the exploitation of West Siberian
and Central Asian oil and gas fields
This paper discusses'the development of the Soviet
large-diameter pipe industry since 1960 and the role
of imported pipe in Soviet construction of oil and gas
pipelines. It then examines Soviet plans to increase
production of large-diameter pipe and estimates pipe
requirements for Soviet oil and gas pipeline programs
and the likely level of supply during 1986-90. The
report assesses the USSR's potential to reduce large-
diameter pipe imports after 1985 and the effect this
reduction would have on overall Soviet hard currency
balances. The paper closes with a discussion of some
of the political factors that could affect the Soviet
decision to reduce dependence on Western suppliers.
Appendix A discusses the CIA methodology for esti-
mating Soviet large-diameter pipe requirements dur-
ing 1986-90.
construction of less than 200 kilometers (km) of 1,020- 25X1
mm pipeline. Since then Soviet production has in-
creased steadily to about 2.2 million tons in 1982 (see
figure 1 and table 1). Although technically still behind
the West, the Soviets have made steady gains both in 25X1
increasing the diameter of the pipe and in raising the 25X1
operating pressure these pipes can withstand (see the
discussion below on the relationship between pipe 25X1
diameter, operating pressures, and annual capacity).
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Trends in Production
In 1962 Soviet production of large-diameter pipe was
about 50,000 tons-an amount sufficient to support
In 1962 NATO embargoed exports of large-diameter
pipe to the USSR in an effort to delay construction of
an oil pipeline to Eastern Europe on the grounds that
' "Large-diameter pipe" as defined in this paper has an outside
diameter of 1,020 mm or more. The most common sizes are 1,020
mm, 1,220 mm, and .1 420 mm-40, 48, and 56 inches, respective-
Figure 1
Soviet Union: Large-Diameter Pipe Production
and Imports, 1962-82
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Table 1
Soviet Pipe Production:
Chronology of Major Events
1961 Novomoskovsk Pipe Plant began production of 1,020-
mm pipe.
1962 NATO embargo imposed on large-diameter pipe; Soviet
production of 1,020-mm pipe was 50,000 tons.
1963 Two shops at Khartsyzsk Pipe Plant began 1,020-mm
pipe production.
Shop at Chelyabinsk Pipe Plant began 1,020-mm pipe
production.
1964 Three shops at Zhdanov Pipe Plant began 1,020-mm
pipe production.
Shops at Chelyabinsk Pipe Plant modified to produce
1,220-mm pipe.
Shops at Zhdanov Pipe Plant reconstructed to produce
1,220-mm pipe.
1970 USSR production of 1,020- and 1,220-mm pipe was
about 1 million tons.
1971 Volzhskiy Pipe Plant began production. Technology and
equipment provided by Czechoslovakia.
1972 Chelyabinsk Pipe Plant reconstructed to produce pipes
with thicker walls.
1974 Soviets complete construction of a 1,020- to 1,420-mm
pipe mill at Khartsyzsk.
1979 Shop at Khartsyzsk Pipe Plant began limited production
of 1,420-mm pipe.
1982 First production of multilayer pipe at Vyksa Pipe Plant.
Experimental two-layer 1,420-mm spiral seam success-
fully produced at Novomoskovsk Pipe Plant.
1983 Soviets announce that production of 1,420-mm pipe will
reach 250,000 tons at Vyksa in 1983.
it enhanced Soviet military capabilities. The embargo
probably delayed completion of the "Friendship" oil
pipeline by about one year.' More importantly, the
embargo also accelerated the modification of existing
pipe mills and provided impetus to the construction of
new, large-diameter pipe mills. By 1965 the USSR
was producing about three times as much 1,020-mm
pipe as the amount that would have been supplied
under the Western contracts canceled by the embar-
go. By 1966 the Novomoskovsk, Zhdanov,
Chelyabinsk, and Khartsyzsk mills were producing
1,020-mm pipe. Combined output of these plants
amounted to about 735,000 tons annually, almost
15 times as large as output in 1962.
With memories of the NATO embargo still fresh,
Soviet leaders continued their efforts to create domes-
tic capacity for the production of 1,220-mm pipe.
During 1966-70 the Soviets started to produce 1,220-
mm pipe at a new mill at Chelyabinsk. In 1970 Soviet
output of 1,020- and 1,220-mm pipe reached about
1 million tons.
The Soviets completed mills capable of producing
1,020- to 1,420-mm pipe at Volzhskiy in 1971 and
Khartsyzsk in 1974. They could not, however, pro-
duce sufficient amounts of steel plate strong enough
to operate at 75 atmospheres (atm) of pressure. By
increasing the diameter and operating pressures of the
pipe, the Soviets can greatly increase the amount of
gas flowing through each pipeline and thereby reduce
the number of pipelines needed to deliver a given
amount of gas. The improvement in pipeline efficien-
cy is also mirrored in reduced investment and operat-
ing costs (see figure 2 and table 2). For example, a
1,020-mm line operating at 75 atm can handle about
12 billion cubic meters of gas per year, whereas a
1,420-mm line operating at the same pressure can
handle 33 billion cubic meters per year. In other
words the Soviets would have to build about three
1,020-mm lines running at 75 atm to match the
capacity of one 1,420-mm line. In terms of steel
requirements, one 1,420-mm line (4,000 km in length)
would require about 2.6 million tons of steel pipe.
Three 1,020-mm lines of the same length would
require about 3.6 million tons of steel pipe. The
strength and quality of the pipe also play an important
role. For example, a 1,420-mm line at 75 atm can
handle about 60 percent more gas than a 1,420-mm
line at 55 atm, but it requires stronger, higher quality
steel.
Soviet production of large-diameter pipe increased
steadily during the 1970s, reaching about 2 million
tons per annum by the end of the decade. Most of the
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Figure 2
Large-Diameter Gas Pipeline: Relationship
Between Pipe Diameter, Operating Pressures,
and Annual Capacity
Billion cubic meters
50
1,420-mm pipe
/
/
/
/
0 1,220-mm pipe
?
0 25 50 75 100
Operating pressures
(atmospheres)
Note: The dashed line represents theoretical values. Currently 75
atmospheres is the highest operating pressure of LD gas pipelines.
output consisted of 1,020- and 1,220-mm pipe. The
information that is available suggests that nearly all
of the pipe currently produced in the Soviet Union for
high-pressure 1,420-mm gaslines uses steel plate im-
ported from the West.
The Role of Imports
Despite impressive gains in the quantity and quality of
their pipe, the Soviets have been highly dependent on
the West for large-diameter pipe for the last 25 years.
During the 1960s the Soviets imported about 2.8
million tons of pipe, almost all 1,020 to 1,220 mm in
diameter. Imports accounted for about 40 percent of
total Soviet pipe supply during this period.
Table 2
USSR: Investment and Operating Costs
for Large-Diameter Gas Pipelines.
in the Central Regions a
Capital
Investment b
(rubles/m'lkm)
Operating
Expense c
(rubles)
Throughput d
(billion m'lyear)
17.5
2.46
12
1,220 mm
16.8
2.29
23
1,420 mm
12.4
2.25
33
a Information is extracted from Soviet energy transport monograph,
Ekonomika transporta topliva i energii, Moscow, 1980.
b Capital investment for 1 kilometer of pipeline in thousand rubles
divided by the expected annual gas throughput (in billion cubic
meters). For pipeline construction in the northern regions, capital
investment nearly doubles.
e Cost in rubles to transport 1 billion cubic meters of gas
1 kilometer.
d At 75 atm.
the USSR to build an integrated pipeline network
connecting all major gasfields with important centers
of industry and population
Pipe Requirements During 1981-85
On the basis of Soviet media reports, we estimate that
the Soviets will lay about 36,000 km of large-diameter
oil and gas pipelines during 1981-85. Of this total,
20,000 km will be 1,420 mm in diameter and about
16,000 km will be 1,020 and 1,220 mm. To meet these
goals the USSR will need about 13 million tons of
1,420-mm pipe and about 6-7 million tons of 1,020-
and 1,220-mm pipe.3
During the 1970s the Soviets began to lay transconti-
nental 1,420-mm gaslines. As noted, the Soviets were
unable to produce high-quality plate for high-pressure
gaslines and were totally dependent on the West,
primarily Japan and West Germany, for 1,420-mm
pipe as well as steel plate for domestic 1,420-rrim pipe
production (see figure 3). During 1971-80, total Soviet
pipe imports amounted to an estimated 15 million
' Calculated on the basis that 1 km of 1,420-mm pipe weighs 650
tons, and 1 km of 1,020- and 1,220-mm pipe weighs 300 and 450
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Figure 3
Stresses Created by 75-Atmosphere
Line Pressure
Although an internal line pressure of 75 atmospheres exerts a
stress of 77.5 kg per cm2 (1,140 psi) perpendicular to the pipe wall,
much larger stresses are created in the tangential direction. This
may be visualized by focusing on the area of the pipe enclosed by
the blue box. As illustrated in the inset, the internal forces
perpendicular to the pipe wall are cumulatively trying to pull apart
or "open" the pipe as indicated by the arrows.
As the pipe's diameter is increased, maintaining the same operat-
ing pressure creates additional stress, and the strength of the steel
must be increased. In other words, higher grade steel is required to
sustain 75 atmospheres in 1,420-mm pipe than in 1,220-mm pipe.
For this reason, linepipe designed for operating at 77.5 kg per cm2
(1,140 psi) is required to have a minimum yield strength of nearly
5,000 kg per cm2. (Yield strength is defined as that maximum force
per unit area at which the material returns to its original physical
dimensions after the load is removed.)
In addition to being unable to make 1,420-mm linepipe for high-
pressure operation, the Soviets, until recently, were unable to pro-
duce pipe that could be used in arctic conditions. Arctic-grade
steels must be resistant to embrittlement caused by the extremely
low temperatures, and to fracture propagation, which is enhanced
by low temperature.
purchases of 2.2 million tons in 1981-82.
We anticipate that, to support their 1,420-mm pipe-
line program, the Soviets will import about 11 million
tons of 1,420-mm pipe and about 2 million tons of
steel plate during 1981-85. The import bill for
1,420-mm pipe and steel plate probably will amount
to roughly $7 billion (1982 prices) during the current
five-year plan. Preliminary information suggests that
Soviet imports of 1,420-mm pipe could reach 2.6
million tons in 1983, compared with average annual
$60-75 million per year at 1982 prices.
Imports of 1,020- and 1,220-mm pipe probably will
remain at about 200,000 to 400,000 tons per annum.
The combination of imports and domestic production
should be more than adequate to cover Soviet require-
ments for pipe of these sizes. The associated hard
currency outlays will be comparatively minor, about
Pipe Requirements During 1986-90
We estimate that annual Soviet requirements for
large-diameter pipe will fall during 1986-90, the
result of a slowdown in the construction of gas
pipelines and a halt in construction of new oil pipe-
lines (see table 3). We believe that annual Soviet
requirements for 1,420-mm pipe will drop to about
1.8 million tons per annum during 1986-90, compared
with about 2.6 million tons per annum during
1981-85. Similarly, annual requirements for 1,020-
and 1,220-mm pipe probably will fall to about 1
million tons per year during 1986-90, compared with
about 1.3 million tons per annum during the current
five-year plan. (Appendix A discusses the basis for the
estimates of requirements for pipe for new lines and
for replacing pipe in old lines.)
would be imported.
Our estimate for annual Soviet requirements of 1,420-
mm pipe during 1986-90 assumes no additional gas-
export pipeline construction during this period. If the
Soviets were to build a second gas-export pipeline in
the late 1980s, similar to the Siberia-to-Europe line
now nearing completion, an additional 3 million tons
of pipe would be required-most of which probably
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Table 3
USSR: Installation of Large-Diameter Pipeline
Oil (1,020-1,220 mm)
1,300
3,400
8,000
6,900
3,200
NEGL
Gas (1,020-1,220 mm)
6,635
14,082
16,103
12,474
13,200
14,000 a
Gas (1,420 mm)
0
0
3,708
11,000
20,000
14,000
Total
7,935
17,482
27,811
30,374
36,400
28,000
Oil Pipelines. On the basis of previous analysis, we
believe that the USSR will construct no large-diame-
ter oil pipelines during 1986-90.` Oil production is
increasing at less than 1 percent per year and proba-
bly will peak and begin to fall later in the 1980s.s If
this estimate is correct, major additions to the pipeline
network will not be required. (In any event, because
the pipe used for main oil pipelines weighs less than
linepipe for gas transmission and the operating pres-
sures are not as great, the Soviets can construct long-
distance, main transmission oil pipelines entirely with
domestic technology:)
The pace of construction of large-diameter crude oil
pipelines has already slowed from a high of 8,000 km
during 1971-75 and 6,900 km during 1976-80 to an
estimated 3,200 km during 1981-85; in large part this
reflects the slowdown in the growth of oil production.
West Siberia currently accounts for more than 50
percent of Soviet crude oil production. Five large-
diameter lines currently transport crude oil out of this
region, and construction of a sixth line is under way.
If this pipeline is placed in service during 1986-90, we
estimate that the usable throughput of the West
Siberian oil pipeline network will be 8.2 to 8.9 million
barrels per day (b/d). This capacity should be more
than enough to transport the 7 to 8 million b/d that
CIA estimates will be produced in this region in 1990.
Although East Siberia and offshore basins in the Kara
Sea and Barents Sea may contain abundant oil re-
sources, we believe that technological constraints, the
absence of economic infrastructure, and the remote-
ness of these areas will prevent significant oilfield
development until at least 1990 and probably later.
Thus, we believe that no oil transmission pipelines will
be required from these areas during 1986-90.
About 75 percent of the existing large-diameter oil
pipelines were built during 1970-80 and probably will
remain fundamentally sound until at least 1990.
Thus, we believe that the amount of large-diameter
pipe needed for replacement of oil pipelines in
1986-90 will be very small, mainly limited to the
replacement of short segments.
Gas Pipelines. In contrast to oil pipeline construction,
Soviet gas pipeline construction has averaged about
30,000 km per five-year period since 1965. The plan
for 1981-85 is 48,000 km, including 20,000 km of
1,420-mm pipeline. (We estimate, on the basis of
actual construction in 1981 and 1982, that the Soviets
will lay about 42,000 km of gaslines during 1981-85.)
The growth in the total length of the gas pipeline
network was needed to support the steep rise in gas
production-from 128 billion cubic meters in 1965 to
501 billion cubic meters in 1982. We estimate that
gas production will continue to increase, to about
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595 billion cubic meters in 1985 and to roughly 710
billion cubic meters in 1990. Thus, the need for new
gas pipelines will remain great through 1990
The level of gas production in the late 1980s will
depend heavily on Soviet success in substituting gas
for other fuels in industrial processes, electric power
generation, and space heating. How far substitution
proceeds will in turn depend on the rate of expansion
of the distribution grid carrying gas from the main
pipelines to industrial enterprises and to power and
heating plants. Underlying this estimate are assump-
tions about the absorptive capacity of the market. We
think that the ability to market the gas rather than
the availability of gas reserves will govern the rate of
increase in gas output.
The share of large-diameter pipelines in total Soviet
gas pipeline construction climbed sharply in the past
two decades-from about 30 percent during 1961-65
to 75 percent during 1976-80. For 1,420-mm gas
pipelines, the share has increased from nearly
12 percent during 1971-75 to a planned 40 percent in
the 1981-85 period. We believe that the trend toward
the use of 1,420-mm pipe will continue
We estimate that the Soviets will need to lay roughly
25,000 km of new, large-diameter gas pipelines during
1986-90, of which 14,000 km will be 1,420 mm in
diameter. We also estimate that the Soviets will lay
about 3,000 km of replacement gaslines.
Our estimate of planned 1,420-mm gas pipeline con-
struction during 1986-90, some 14,000 km, is about
30 percent less than planned construction for the first
half of the decade. Some Soviet economists have
already commented that the growth of gas production
in West Siberia may slow because:
? The cost of pipeline construction in Western Siberia
is so great. According to the Soviet pipeline con-
struction minister, the total cost of the gas-export
pipeline will amount to about 15 billion rubles
(about $20 billion).
? The Soviets face limits on the amount of gas that
can be absorbed in the domestic economy. Construc-
tion of storage and distribution systems is lagging,
slowing the substitution of gas for other energy
sources.
Moreover, the Soviets cannot step up sales of gas to
other Communist countries and Western Europe at
will. In Eastern Europe, the high proportion of oil
used in agriculture and transportation limits possibili-
ties for substitution of gas for oil.' According to East
European economists, Soviet gas imports may in-
crease from 32 billion cubic meters in 1983 to 41-45
billion cubic meters in 1990. Future West European
energy import demands may be affected increasingly
by energy security considerations
Nonetheless, even if Soviet construction of 1,420-mm
pipelines slows as we expect, the pace of construction
will still be rapid. During 1986-90 the Soviets may
build four or five pipelines, each about 3,000 km in
length, compared with six such lines during 1981-
85-a pace of pipeline construction unmatched else-
where in the world.
Soviet Production Capacity During 1986-90
At the same time that Soviet requirements for large-
diameter pipe will be falling, domestic production
capacity will be increasing. We believe that Soviet
production of 1,420-mm pipe suitable for use in gas
pipelines may rise by as much as 900,000 tons, to
1.3 million tons per annum some time during 1986-90.
The startup and expansion of output at a new pipe
mill at Vyksa should add some 500,000 tons to Soviet
capacity for production of 1,420-mm pipe. In addi-
tion, the capacity available for 1,420-mm pipe pro-
duction at Khartsyzsk will increase from 400,000 tons
to as much as 800,000 tons. Production at Khart-
syzsk, however, may continue to depend on imports of
steel plate from the West.
Multilayered Pipe at Vyksa. The new mill being built
at Vyksa (near Moscow) to produce 1,420-mm pipe
will produce a multilayered 1,420-mm pipe, in con-
trast to the single-walled pipe imported from the
West. The multilayered pipe will be produced from
ordinary low-carbon steel sheet-which the Soviets
can manufacture-in contrast to the high-strength,
low-alloy (HSLA) steel plate used in single-walled
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pipe for high-pressure gasline service. The multilayer
technology is far behind the Western state of the art.
Because of increased metal, energy, and welding
requirements (the pipe is about 50 percent heavier
than Western pipe), this kind of pipe would be
prohibitively expensive to manufacture in the West.'
Nevertheless, US metallurgical experts are certain
that the Soviet pipe will work as planned.' (See
appendix B for details.) Moreover, it has the impor-
tant advantage of not requiring high-quality HSLA
steel plate.
Construction at Vyksa has proceeded rapidly and
should be completed by 1985. The Soviets have
announced that the plant will produce 250,000 tons of
pipe in 1983 and 500,000 tons in 1985. We estimate
that the plant could be operating at full capacity as
early as 1986.
Production of 1,420-mm Pipe at Khartsyzsk. We
estimate that the Soviets will have a requirement for
1.4 million tons per, year of 1,020- and 1,220-mm pipe
during 1986-90, 1 million tons for 1,020- and 1,220-
mm gas pipeline construction, and a residual require-
ment of 400,000 tons for irrigation systems and water
mains. Combined output of this pipe in the Chelya-
binsk, Zhdanov; Novomoskovsk, and Volzhskiy pipe
plants is projected at 1.45 million tons per year (see
figure 4).
Until recently, the Khartsyzsk plant produced mostly
1,020- and 1,220-mm pipe because the demand for
pipe of this size was so great. The Soviets laid about
24,000 km of 1,020- and 1,220-mm oil and gas lines
during 1971-75 and 19,500 km during 1976-80. (See
appendix A for more details.) We foresee that, with a
decline in demand for 1,020- and 1,220-mm pipe,
Khartsyzsk may be able to devote some, if not most,
of its capacity (about 800,000 tons) to production of
1,420-mm pipe. The Khartsyzsk plant has the fabrica-
tion equipment to produce 1,420-mm pipe. It only
needs the steel plate with the requisite strength and
ductility.
' Because multilayered pipe is heavier than conventional pipe, we
have expressed annual production at Vyksa in terms of an equiva-
lent weight corresponding to the amount of pipeline that could be
laid if conventional, single-layered Western pipe were used
8 The Soviets claim that the pipe produced at Vyksa will be capable
of operating at 120 atm of pressure. Although we cannot rule out
this claim entirely, most of the evidence suggests that this pipe will
According to media reports, the Soviets intend to
expand production of 1,420-mm pipe at Khartsyzsk
using domestically produced steel plate and strip
during 1986-90. The Soviets are adding new steel-
making capacity to supply the large amounts of steel
sheet and plate the pipe mills will require.
most of the sheet and plate will be
supplied by new facilities at Novyy Lipetsk, Cherepo-
vets, Zhdanov, and by existing facilities at Azovstali.
These plants are also
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equipped with continuous casting equipment which, 25X1
according to our earlier analysis, is another indication
of the Soviet Union's potential to produce steel plate
of uniformly high quality.'
Nonetheless, the Soviet track record indicates that the
Soviets will, at best, develop the capability to produce
HSLA plate for civilian consumers slowly over the
1986-90 period (see inset). Analysis of open-source
Soviet technical journals indicates that limited pro-
duction of high-strength, low-alloy plate for use in
pipelines began in 1978 at the Azovstal' Steel Works.
The Soviets, however, are still importing steel plate
for pipe production, suggesting that they have not
worked out all the problems in large-scale production
of HSLA steel plate.
According to a Soviet pipeline construction journal,
the Khartsyzsk plant is currently producing about
400,000 tons per year of 1,420-mm pipe. We believe
that most of the pipe is produced using plate imported
from the West. During 1986-90 about 800,000 tons of
capacity will be available at Khartsyzsk for 1,420-mm
pipe production. If unable to produce adequate
amounts of high-quality HSLA steel plate during
1986-90, the Soviets will have to increase steel plate
imports substantially from the current level of
400,000 tons per year to meet the requirements for
1,420-mm pipe production at Khartsyzsk.
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Figure 4
Soviet Large-Diameter Pipe Plants
Baltic Sea ~r}
Zhda v
'Khartsy
To summarize, we estimate annual Soviet production
of 1,420-mm pipe during 1986-90 at 1.3 million tons
(500,000 from Vyksa and 800,000 at Khartsyzsk). The
steel requirement for manufacture of multilayer pipe
at Vyksa can be met readily from Soviet-produced
steel sheet. The pipe production at Khartsyzsk, how-
ever, may depend to a substantial degree on imported
Western plate if the Soviets are unable to produce
adequate amounts of HSLA steel plate themselves
(see figure 5)
Kilometers
1_C?
As noted above, Moscow's requirements for 1,420-
mm pipe are likely to amount to about 1.8 million tons
annually during 1986-90. Soviet production will prob-
ably increase from 400,000 tons to about 1.3 million
tons per annum during this period, suggesting an
import requirement of 500,000 tons of pipe and up to
The United States Government has not recognized
the incorporation of Estonia, Latvia, and Lithuania
into the Soviet Union. Other boundary representation
is not necessarily authoritative.
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Steel Plate for Large-Diameter High-Pressure Pipe
According to analysis of Soviet technical journals
and a report delivered at a metals symposium by a
Soviet metallurgist, the Soviet Union was not produc-
ing high-strength, low-alloy (HSLA) steel plate strong
enough to be used for pipe in gasline service at an
operating pressure of 75 atm until the late 1970s (for
pipe production). The Soviet military probably pre-
empted the vast majority of the HSLA steel plate
that was produced.
During the late 1970s, the Soviets developed a limit-
ed capability for the Khartsyzsk plant. The Soviets
had to develop a steel with a composition that was
strong enough to permit operation at 75 atm and
ductile enough to be used in Arctic conditions with-
out additions of molybdenum. (Molybdenum, the
primary additive used by Western pipe manufacturers
to limit brittleness, is in short supply in the Soviet
Union.) We believe that West German involvement in
construction of the'new pipe-coating mill at Khart-
syzsk indicates the increased importance of this
plant.
800,000 tons of steel plate. This estimated require-
ment for steel plate imports is based on our assess-
ment that the Soviet steel industry still faces many
hurdles before it can achieve large-scale production of
HSLA steel plate of consistently high quality. In a
best case scenario from the Soviet viewpoint, if devel-
opment of HSLA steel plate proceeds smoothly to
support 1,420-mm pipe production at the Khartsyzsk
mill, imports of steel plate could decline to negligible
levels. This could reduce the annual import require-
ment to as little as 500,000 tons of 1,420-mm pipe and
little if any plate by 1990, compared with 2.2 million
tons of pipe and 400,000 tons of plate per annum
during 1981-85.
Hard Currency Impact
A cutback in imports of large-diameter pipe and steel
plate would clearly help Moscow meet other priority
import requirements.10 We estimate that annual
Figure 5
Soviet Union: Projected Annual Imports of
Steel Plate and 1,420-mm Pipe
0 1981-85a
a Projected.
b Estimated.
Soviet expenditures for 500,000 tons of 1,420-mm
pipe and 800,000 tons of steel plate for manufacture
of 1,420-mm pipe during 1986-90 could drop to as
little as $500 million compared with $1.3 billion
during 1981-85. The substitution, of purchases of steel
plate for imports of pipe is attractive because the price
of steel plate per ton is only about half the price per
ton of 1,420-mm pipe. Since our estimates indicate
that the USSR will be able to increase hard currency
imports little, if at all, in the second half of the decade
without a sizable increase in its debt service ratio, a
cut in its steel imports would help Moscow significant-
Impact on Western Suppliers
A substantial drop in Soviet imports of 1,420-mm pipe
would most affect Japan and West Germany-the
USSR's largest suppliers. Presently, about half of
Japanese and virtually all of West German production
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of 1,420-mm pipe is earmarked for the Soviet market.
Several of the largest West German mills, employing
thousands of workers, are currently producing solely
for the Soviet market. An abrupt cut in Soviet
purchases after 1985 would be especially hard to
manage, because it is highly unlikely that any other
country will be buying 1,420-mm pipe in the volume
the USSR currently imports.
The Soviets are unlikely to make sudden and sharp
cuts in pipe purchases. We expect that increased
Soviet output of 1,420-mm pipe will be phased in over
a period of several years, giving Western suppliers
some breathing room. Moreover, Western companies
are aware of Soviet efforts to produce 1,420-mm pipe
and thus are unlikely to be caught by surprise when
the Soviets begin to reduce pipe purchases. The
Soviets also would want to avoid political conse-
quences resulting from any sharp unexpected cuts in
orders placed in countries with which the USSR is
trying to improve political ties.
Political Versus Economic Trade-Offs
US experts who have studied the multilayer technol-
ogy employed at Vyksa have commented that, if this
process were used in a Western plant, costs might be
at least double current Western levels because of
increased metal and energy requirements. Moreover,
each weld in the field will take longer to perform and
more pipelayers will be required to handle the heavier
pipe sections.
We believe that the Soviet commitment to manufac-
ture 1,420-mm pipe on a large scale, even at substan-
tial economic costs, reflects Moscow's ongoing
concern about possible vulnerability of its energy
program to Western economic sanctions. Analysis of
public statements reveals mounting Soviet skepticism
over the benefits of expanded East-West trade and
technology transfer from 1977 onward. The recent
embargoes probably rekindled earlier Soviet concerns
of the vulnerability of Moscow's energy program to
Western pressure. Such factors probably reinforced
the decision to develop 1,420-mm pipe production
capacity despite the high economic costs involved
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Appendix A
Methodology for Estimating
Requirements for Soviet Gas
Pipeline Construction, 1986-90
The Soviets have not yet published the target for gas
pipeline construction during 1986-90. We have esti-
mated the requirement by using the past relationship
between gas production and the length of the large-
diameter gas pipeline network and our estimate of
future gas production.
The almost complete integration of the gas pipeline
network through pipeline interconnections between
the gas-producing fields and industrial areas in the
Soviet Union tends to minimize the need for new
transmission pipelines. Additional capacity in the
trunkline system will be concentrated along the corri-
dors from West Siberia to regional distribution cen-
ters where the new transmission pipelines will tie into
the existing network. By 1985 most industrial areas
will have access to West Siberian gas via the new
transmission pipelines presently operational or under
construction and the, existing regional pipeline net-
Table 4
USSR: Relationship Between Gas
Production and Length of
Gas Pipeline Network
Year
Gas Production
(billion m)
(a)
Length of Network
(1,000 km)
(b)
Ratio
(a)-(b)
1965
127.7
41.8
3.05
1970
197.9
67.5
2.93
1975
289.3
99.2
2.90
1980
435
129.7
3.35
1985
595 a
172.2 b
3.45
e CIA estimate.
b On the basis of the amount of gas pipeline laid during 1981 and
1982, 17,000 km, we estimate that pipeline construction during
1981-85 will be 42,500 km. This would bring the total length of the
gas pipeline network to 172,200 km in 1985.
work.
If, for example, Central Asia should become a net
importer of gas from other regions in the USSR, a
new transmission pipeline probably would not have to
be built into Central Asia. The reversal of flow in the
Central Asia-Urals gas pipeline system would allow
Urengoy gas to reach Central Asia (see figure 6). If
production from the Orenburg gasfields decreases and
is no longer adequate to supply the needed volume of
gas to the "Soyuz" gas pipeline (the major pipeline for
supply of gas to Eastern Europe), then the recently
completed Urengoy-to-Novopskov pipeline could pro-
vide gas to the "Soyuz" system, which passes through
Novopskov. Alternatively, Urengoy or Central Asian
gas could feed the Soyuz gasline via a 1,220-mm
gasline, which connects Dombarovskiy on the Central
Asian-Urals system with the Orenburg gasfields.
According to Soviet media reports, this gasline was
built explicitly to link the Orenburg and Central
large-diameter pipe requirements will not involve
exclusively 1,420-mm pipe and that a substantial
requirement for 1,020- and 1,220-mm pipe will exist
during 1986-90. During 1971-75 and 1976-80, about
16,000 and 12,500 km of pipeline 1,020 and 1,220
mm in diameter, respectively, were laid.
The ratio between annual gas production and the
cumulative length of the gas pipeline network in 1980
is now somewhat higher than during 1965-75, and in
1985 it will probably be about 3.45 (see table 4).
Using an estimate of 710 billion cubic meters for gas
production in 1990, combined with the 1985 ratio of
3.45 billion cubic meters for each 1,000 km of gas
pipeline, we estimate that 33,600 km of new gas
pipeline may be needed during 1986-90.
Asian gasfields.
The implementation of large programs to substitute
gas for other forms of energy will require additional
construction of lateral pipelines for intraregional dis-
tribution. For this reason, we believe that the Soviet
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Figure 6
Major Gas Pipeline Corridors in the Soviet Union
r-y..
Baltic Sea
Yeningrad
esY crna i rvn-e-S
`a ~
Alexsandrov Gay Chelyabinsk
Orenburg
Orenburg
gasfield
Dombarovskiy
Aral
Sea
~)Gazfi gasfield
Cer7 ic.I f',S/E
Lake
Balkhash
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The United States Government has not recognized
the incorporation of Estonia, Latvia, and Lithuania
into the Soviet Union. Other boundary representation
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Secret
Table 5
USSR: Share of Large-Diameter
Gas Pipelines in New Gas
Pipeline Construction
1,020-1,220 31.9 54.9 50.8 40.9 NA
mm
Large-Diameter Gas Pipelines
Since 1961-65 the proportion of large-diameter pipe-
lines added to the network has more than doubled (see
table 5). We believe that the percentage attained
during 1976-80, about 75 percent, will probably be
maintained throughout the 1980s. Further, during
1981-85 about 40 percent, or 20,000 km, of the
planned new pipelines are to be 1,420 mm in diame-
ter, and we believe that this percentage will remain as
high during 1986-90.
In estimating the 1986-90 gas pipeline requirements,
we have used the 1981-85 ratio because we believe
that the regional patterns of gas production and
pipeline construction will be similar during the two
periods:
? West Siberia will provide nearly all of the increase
in Soviet gas production. New transmission pipe-
lines will have to be built from the developing
Urengoy gasfield. The Soviet media already have
reported that at least three new pipelines will be
needed to transport increases in West Siberian gas
production during 1986-90 and that another gas-
export pipeline may be laid.
? Central Asian gas production as a whole will remain
relatively constant. New production from the Daule-
tabad fields will supplement declining production
from the Gazli and Shatlyk fields. However, the
construction of another major transmission pipeline
from this area probably will not be required. The
Central Asian system includes six transmission
pipelines (two to the, Urals region and four to the
European USSR).
? Although gas production in the older gasfields of the
Ukraine and the Caucasus will continue to decline,
new transmission pipelines from Urengoy will offset
the effects of those regional production decreases.
During 1981-85, according to Soviet media, two
gaslines will be built to the Ukraine, one to Kharkov
and the other to Kiev. These reports also indicate
that one of the lines is already under construction.
Because of the large industrial base in the Ukraine,
some large-diameter lateral transmission gaslines
(1,020 and 1,220 mm) probably will be required for
this area.
Therefore, 75 percent of the estimated 1986-90 re-
quirement of 33,600 km yields some 25,000 km of
new large-diameter gas pipeline of which 14,000 km
(40 percent of 33,600 km) will be 1,420 mm in
diameter. The estimated 14,000 km of 1,420-mm
gasline would enable the Soviets to build four or five
gaslines from the Urengoy gasfields to the European
USSR with an average length of about 3,000 km.
This estimate is generally consistent with the frag-
mentary Soviet media reports on gasline construction
planned for 1986-90.
Replacement Requirements.
Most pipelines built in the United States have a
planned life expectancy of 20 years, although they
usually last longer than this. In contrast, the replace-
ment-free life for steel pipe in temperate areas of the
USSR is 11 years when bituminous coated and 17
years when wrapped with tape, according to a 1982
Petrostudies estimate.
some gas roes in the harsh climate of
West Siberia and in the acidic soil of Central Asia
have required replacement of lengthy segments after
only 10 years of operation. Accordingly, we estimate
that the replacement-free life for most Soviet gas
pipelines is about 15 years (compared with 20 years
for oil pipelines), and that subsequent replacement of
pipeline segments is required at the rate of about
1 percent a year.
We believe that, at least until 1985, Soviet replace-
ment requirements for gas pipelines will be small.
About 80 percent of the Soviet Union's 1,420-mm gas
pipelines were laid after 1975 and probably are, with
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Table 6
Soviet Large-Diameter Pipe Production Plants
Method
Millimeters
Floorspace (m')
Production,
1985
In 1975
1976-83
Expansion,
1984-85
(tons)
Chelyabinsk
Longitudinal
(two seam)
1,020
1,220
168,509
0
0
700,000
Khartsyzsk
Longitudinal
(two seam)
1,020
1,220
1,420
87,293
0
0
820,000
Volzhskiy
Longitudinal
(two seam)
Spiral
1,020
1,220
1,420
306,665
150,321
0
450,000
Vyksa
Multilayer
1,420
0
126,540
126,540
500,000 b
Zhdanov
Spiral
1,020
132,846
0
60,000
Total
791,651
298,454
178,284
2,710,000
a Large-diameter pipe production includes 30,000 tons expected to
come on line by 1985.
b Because the multilayered pipe at Vyksa is about 50 percent
heavier than conventional pipe, we have equated estimated annual
production at Vyksa to an equivalent weight corresponding to the
amount of pipeline that could be laid if conventional single-layer
Western pipe were used.
the exception of some individual small segments, still already been replaced. Therefore, we estimate a total
in good order. The Soviets, however, laid some 16,000 requirement of large-diameter pipe for 1986-90 of
km of 1,020- and 1,220-mm gas pipelines during about 28,000 km, of which 25,000 km will be for new
1971-75. Of these, we believe that at least 5 percent, construction and some 2,800 km for replacement of
or 800 km, will require replacement during 1986-90. older lines.
We also estimate that 10 percent, or about 2,000 km,
of the pipeline built during 1961-70 will also require
replacement-indeed, some segments probably have
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