Nov. 9 (Bloomberg) -- Russian pipemakers asked the government for permission to supply as much as 840,000 metric tons of pipes for the second stage of OAO Gazprom’s Nord Stream Ag pipeline, said Alexander Deineko, the head of industry lobby group Fund for Development of Pipe Industry.

Pipemakers including OAO TMK, OAO Vyksa Steel Works and OAO Severstal’s Izhora mill agreed to the amount, Deineko said in Moscow at an industry conference organized by Metal Supply & Sales magazine.

“There should be the ‘proportional’ principle,” Deineko said. “If a project is 50 percent owned by Russia, it should be 50 percent supplied by the Russian pipes and equipment. We proposed the government to introduce a special law on this.”

The first stage of the Nord Stream venture to build a natural gas pipeline under the Baltic Sea from Russia to Germany was 75 percent supplied by non-Russian pipes, he said. The total amount of large-diameter pipes needed for Nord Stream is about 2.2 million tons, Deineko said. Supplying 840,000 tons for the second stage would raise Russia’s share in total pipe supplies to the project to 50 percent, he said.

Russia may increase large-diameter pipes demand to 1.67 million tons in 2010, up 37 percent from 1.22 million tons this year, TMK Deputy Chief Executive Officer Sergei Bilan said.

In total, Russian pipe production will rise 5 percent next year to as much as 6.2 million tons, Bilan said. Domestic pipe demand will probably remain flat in 2010, Deineko forecast.

Letter to Ministry

Five of Russia’s biggest oil companies and Gazprom wrote a letter to Russia’s Industry Ministry in October raising concerns about high prices from Russian pipe makers and a “possible monopoly” in the industry, Viktor Semenov, the head of the ministry’s basic industries department, said.

“There is no basis for such a concern,” Semenov said. “There is a strong competition in Russian pipemaking industry.”

To contact the reporter on this story: Ilya Khrennikov in Moscow ikhrennikov@bloomberg.net

Last Updated: November 9, 2009 09:20 EST