Today within the framework of the St. Petersburg International Economic Forum 2010 Alexey Miller, Chairman of the Management Committee of Gazprom met with Paolo Scaroni, Chief Executive Officer of Eni.

The parties discussed cooperation between the companies within the South Stream project at the pre-FID stage, i.e. before the Final Investment Decision is taken on the pipeline’s offshore section. In addition, the meeting addressed the terms and conditions for EDF’s entry into the shareholding structure of South Stream AG.

During the meeting, accords were reached to sign the respective regulatory documents at the Forum.

Background:

Italy is the third largest Russian gas importer in Europe. In 2009 Gazprom supplied Italy with 19.1 billion cubic meters of natural gas.

In November 2006 Gazprom and Eni entered into the Strategic Partnership Agreement providing Gazprom with the opportunity to directly supply Russian gas to the Italian market starting from 2007. Gas supply volumes will be gradually increased to 3 billion cubic meters per annum by 2010. Under the Agreement, the existing contracts for Russian gas supply to Italy are extended till 2035.

On June 23, 2007 Gazprom and Eni signed the Memorandum of Understanding on the South Stream project execution. The Memorandum outlines the areas of cooperation between the companies in designing, financing, constructing and managing South Stream.

On January 18, 2008 the South Stream AG Special Purpose Entity was registered in Switzerland. The Entity was established by Gazprom and Eni on a parity basis.

On May 15, 2009 Gazprom and Eni signed the second Addendum to the Memorandum of Understanding on the South Stream project execution. The Addendum stipulates an increase in the annual throughput capacity of the pipeline’s offshore section to 63 billion cubic meters of gas, and regulates the gas marketing issues within the project.

On December 3, 2009 Gazprom and Eni signed the Memorandum of Understanding on the South Stream project. The Memorandum envisages that Gazprom and Eni support EDF’s entry into the South Stream project.