November 24, 1998 - LUKOIL Pesident Vagit Alekperov and Gazprom Chairman of the Board Rem Vyakhirev signed a general cooperation agreement on strategic partnership between two companies.
LUKOIL and Gazprom will target partnership at economic integration in the area of oil and gas exploration, production, transportation and refining, marketing of crude oil and gas, petroleum products and petrochemicals, electric and heat power generation, manufacturing of oil field and other equipment.
LUKOIL and Gazprom have specified the guidelines for joint cooperation:
to carry out upstream oil and gas projects in the Yamalo-Nenetsk autonomous region, Nenetsk autonomous region, the Pechora and Caspian seas and the Precaspian basin;
- Sea transportation of crude oil and gas condensate from the Yamalo-Nenetsk autonomous region;
- supplies of crude oil and gas condensate to refineries in Russia and abroad;
- utilization of oil and natural gas as an alternative motor fuel and for manufacturing of modern polymers;
- transportation of associated and natural gas through the gas transportation network of Gazprom.
- Vagit Alekperov and Rem Vyakhirev also signed a Protocol which specifies projects to be developed by LUKOIL and Gazprom in the near future.
For example, Gazprom gas refining entities Orenburgazprom and Astrakhangazprom will start processing associated gas extracted by LUKOIL. The companies have also agreed to design and build associated gas collecting, refining and transportation facilities in the Timan Pechora region as well as provide gas supplies to local towns. Ethylene production entities in Kstovo, Buddenovsk and Tomsk are expected to switch to more efficient types of raw materials - propane, butane, etc. The parties have also reached an agreement on modernization of the Orenburg gas refinery and helium plant for processing of gas and gas condensate produced at the Karachaganak field in Kazkhstan as well as on the completion of the polypropylene production unit at Stavropolpolimerproduct. In addition to that, polyethylene, fuel and lubricants produced by LUKOIL will be supplied to Gazprom entities.
We believe that formation of an alliance between two major Russian companies on a parity basis will be a significant contribution into the real sector of the Russian economy, and in our opinion, it will meet our shareholders’ interests, said LUKOIL President Vagit Alekperov.
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