The Gazprom Headquarters hosted today a working meeting between Alexey Miller, Chairman of the Company’s Management Committee and Paolo Scaroni, Chief Executive Officer of ENI.

The discussion centered on the bilateral cooperation in the energy sector. The parties approved the joint work within the pre-investment stage of the South Stream gas pipeline project and addressed the plan of further actions related to the construction of its offshore section.

In addition, the meeting participants paid attention to cooperation deepening as part of the joint projects implemented in Italy, Russia and in third countries.

Background:

Italy is the third-largest Russian gas importer in Europe. In 2008 Gazprom supplied Italy with 22.4 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 supplies to Italy have been extended till 2035.

On June 23, 2007 Gazprom and ENI inked the Memorandum of Understanding for the South Stream project implementation. The Memorandum sets the areas of cooperation between the two companies in designing, financing, constructing and managing the South Stream.

On January 18, 2008 South Stream AG, a special-purpose company was registered in Switzerland. South Stream AG was incorporated by Gazprom and ENI on a parity basis.

On May 15, 2009 Gazprom and ENI signed the second Addendum to the Memorandum of Understanding for the South Stream implementation. The Addendum stipulates an increase in annual throughput capacity of the pipeline’s offshore section from 31 to 63 billion cubic meters of gas and regulates the gas marketing issues within the project.