Chinese Company Delivers Steel Unfit for Gas Transit in Slovakia

April 26, 2012 Updated: October 1, 2015
Samples of delivered steel pipes. (Segametal Power, Ltd.)
Samples of delivered steel pipes. (Segametal Power, Ltd.)

BRATISLAVA, Slovakia—The underground gas storage reserve initiated in Slovakia in the 1970s has gained strategic value in recent years. The reserve helps to buffer seasonal differences in gas consumption, as well as ensure the security of the nation’s gas supply in the event of a shutdown or interruption of gas imports.

In September of last year, the former Slovak Premier Iveta Radicova announced the establishment of a new gas storage facility at Gajary-baden, which will increase the storage capacity of the whole complex located in western Slovakia by 500 million cubic meters, to a total capacity of 2.5 billion cubic meters, by 2014.

When Slovak subcontractor Segametal Power Ltd. looked for a suitable supplier for the steel pipes to be used to deliver gas to this storage facility, the best option seemed to be the Chinese steel company Hebei Zhonghai Steel Pipe Manufacturing Corporation, located in the city of Cangzhou in Hebei Province.

“They possessed all the required certificates and offered a good price,” CEO of Segametal Power, Ms. Balazovicova, told The Epoch Times.

Since pressure in the gas pipeline is very high, the pipes must meet strict quality standards that were specified in the delivery contract. After the 300-tone supply was delivered to Slovakia, the pipes were found to be rusty inside, so they had to be brushed. During the cleaning process, part of a pipe peeled away.

“At that moment, we started to doubt about the quality of the whole shipment,” Balazovicova recalled.

Poor Quality

Since the route of the gas pipeline is located along the Plavecky Stvrtok village near a residential area, Slovak Segametal Power couldn’t risk the implications of using steel unfit for transporting gas.

At its own expense, it had the shipped steel analyzed at the Faculty of Material Science and Technology of the Slovak University of Technology. After performing the tests, professor Caplovic discovered that the steel pipes didn’t meet the API 5L/EN 10208 standard, which was required under the contract.

Apart from the carbon content exceeding the normal or allowed limit, all of the evaluated steel samples failed to meet the requirements of the “impact-bend test.” The values were around 8 to 12J, while the minimum required is 27J, which means that the steel was too fragile and could breach under low temperatures. That would present a threat of explosion and possible endangering of human lives, particularly since the gas is delivered under high pressure.

“These pipes are not able to be used in applications of the gas industry, and we recommend returning the pipes,” Caplovic concluded from the analysis.

Identical results were offered by two other independent testing facilities, one from the Welding Research Institute in Bratislava and another from the Laboratories of the Czech machinery company Prvni brnenska Strojirna.

Nonrecognition of Return

Upon receiving those findings, the Slovak importer decided to return the shipment. However, the attitude of the Chinese supplier suddenly changed, and it stopped being accommodating and polite. According to the CEO of Segametal Power, Hebei Zhonghai Steel Pipe Manufacturing Corporation refused to act on the return and then, after several order queries, refused to exchange the shipment. Hebei Zhonghai Steel Pipe Manufacturing Corporation didn’t respond to an inquiry from The Epoch Times by press time.

The CEO of the Slovak company contacted the Chinese Embassy in Bratislava and the Hebei Chamber of Commerce, but without any success to date. According to her experience, her inquires have only been met with silence, the twisting of facts, or being given a recommendation to contact the local police in China or the website of the Chinese government.

The Embassy of the Slovak Republic in Beijing also tried to help, but hasn’t been able to resolve the situation thus far. “Regrettably, this isn’t a singular incident,” one employee at the embassy told The Epoch Times.

Other organizations in Slovakia also tried to help with the return of the steel. Marian Farkas from the Sinaco Chamber of Commerce, which specializes in helping Slovak companies do business with China, suggested personal intervention as the only remaining alternative, since the Chinese company refuses to communicate. Admitting that undertaking business with Chinese companies has its stumbling blocks, he suggested that companies should seek the advice of their chambers of commerce before finalizing contracts with Chinese counterparts.

Segametal Power also contacted the TUV Rheinland certification company to re-evaluate the certifications granted to the Chinese manufacturer. According to information provided to The Epoch Times, the company has already contacted its Chinese branch to investigate the issue.

To this day, Hebei Zhonghai Steel Pipe Manufacturing Corporation refuses to accept the return of the steel shipment. The Slovak importer has contacted its lawyers for follow-up.