Today, Gazprom’s Management Committee acknowledged the expediency to acquire a 9% stake in Latvijas Gaze from ITERA-Latvia.

This issue will be submitted for the Board of Directors’ consideration.

Reference:

Gazprom annually delivers some 1.15 bcm of natural gas to Latvian consumers.

Latvijas Gaze’s major business lines are gas acquisition, transmission, storage and distribution within Latvia. The company owns the Inculkans UGS facility, from which gas is delivered to the Novgorod and Pskov regions (some 1 bcm per annum) as well as to Latvia and Estonia.

The design capacity of the Inculkans UGS facility accounts for 4 bcm of gas, to be reportedly increased up to 5 bcm by 2005.

For the time being, Latvijas Gaze’s share capital is divided in 39.9 million shares and its structure is as follows: 25% plus 1 share (Gazprom), 35.6% (Ruhrgas AG), 25% plus 701 shares (ITERA-Latvia), 11.5% (E/ON Energie), 2.9% (minority shareholders) and 117 shares (the Latvian Government).

On 9 July 2002, Gazprom and the ITERA International Group of Companies signed the Agreement on Intentions (valid within 3 years) aimed to adjust relationships, fulfil obligations and settle debts. In particular, the Document envisages for ITERA to repay its debt to Gazprom for the gas transmission services rendered by selling its 9% stake in Latvijas Gaze.

Abiding by this Agreement, Gazprom adopted with ITERA-Latvia the Agreement on purchasing the above-mentioned stake on deferred terms (upon receiving relevant instructions).

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