The Gazprom Headquarters hosted today a working meeting between Alexander Ananenkov, Deputy Chairman of the Company’s Management Committee and Vladimir Mayorov, Director General of Beltransgaz.

The meeting discussed the progress in implementing the Gas Supply and Transit Contract for 2007 through 2011.

The particular attention was paid to the required full payment for the current Russian gas supplies to Belarus in strict compliance with the contractual terms. At the same time, it was highlighted that pursuant to the Contract, from 2008 the gas price for the Republic is being calculated under the most convenient pricing formula compared to Gazprom’s gas supplies to the CIS and European countries.

During the meeting, Alexander Ananenkov pointed out that in case of further nonfulfillment of obligations by the Belarusian party with regard to full payment for the Russian gas, Gazprom reserves the right to take legal action.

Background:

On December 31, 2006 Gazprom and Beltransgaz signed a Gas Supply and Transit Contract for 2007 through 2011. The document fixed the Russian gas price for 2007 at USD 100 per 1,000 cu m, and the pricing formula from January 1, 2008 (which is in line with the Russian gas supply pricing formula for Europe) as well as the discounts to the market price over 2008 to 2010 (0.67, 0.8 and 0.9 respectively). Starting from 2011, Belarus as well as Russian industrial consumers will pay gas prices equally profitable for Gazprom versus prices of gas delivered to Europe.