Today, at Gazprom’s Headquarters, Alexey Miller, the Company’s Management Committee Chairman held a meeting dedicated to the implementation of the Investment Project on the Yuzhno-Russkoye field development.

The meeting addressed issues related to the project financing-based development of the Yuzhno-Russkoye field and resolved to submit these matters for Gazprom’s Management Committee’s consideration in June 2004.

In addition, the parties debated the progress in engineering the North-European gas pipeline. For the time being, over 70% of prospecting has been conducted at the Gryazovets-Vyborg section and 90% of engineering and geological data have been collected on the gas pipeline route and sites of compressor stations. The meeting pointed out that all the works were being performed in accordance with a timetable and were due to be completed in a preset period, allowing the parties to decide on investments into the Project in the 4th quarter of 2004.

Reference:

Under Gazprom’s Order dated 30 June 2003, the Yuzhno-Russkoye field furnishing and the North-European gas pipeline (NEGP) construction Projects were included in a list of investment projects implemented by the Company by applying project financing methods.

The Yuzhno-Russkoye oil and gas field is located in the Krasnoselkup District of the Tyumen Region’s Yamal-Nenets Autonomous Area. The gas reserves of this field are estimated at over 1 tcm, including 800 bcm are proved ones. The Yuzhno-Russkoye field exploration and development licensee is Severneftegazprom, a 100% Gazprom subsidiary.

The Yuzhno-Russkoye field was identified as a main resource base to be used for gas deliveries by the NEGP.

Gazprom’s Management Committee resolved to initiate the implementation of the North-European gas pipeline (NEGP) construction Project on 18 November 2002. The gas pipeline will go under the Baltic Sea from the town of Vyborg to the German coast and then to Great Britain. The NEGP offshore section will total 1,189 km. The NEGP construction will foster expansion of gas supplies to the Scandinavian countries as well as will secure and diversify gas deliveries to West Europe, Russia’s north-west and the Kaliningrad region.

In December 2000, the European Commission resolved to award the NEGP Project with the TEN (Trans European Networks) Status.

The world’s largest energy businesses, including Ruhrgas, Wintershall, Gasunie, Shell, TotalFinaElf, British Petroleum, Centrica and others showed their interest in implementing the NEGP Project.

On 16 January 2004, the RF Government issued Order N64-r, approving a proposal by the Energy Ministry of Russia and Gazprom to engineer the NEGP.

Gazprom plans to finalize all preparations and to take an investment decision on the NEGP in the 4th quarter of 2004.

DIVISION OF RELATIONS WITH MASS MEDIA