A working meeting between Alexey Miller, Gazprom’s Management Committee Chairman and Alexey Mordashov, Chairman of Severstal’s Board of Directors was held today at Gazprom’s Headquarters.

The meeting deliberated on gas deliveries to ferrous metallurgy companies in 2005 as well as promising projects on gas flow scheming throughout the Russian Federation. The parties underscored that while carrying on business both companies were guided by the parameters fixed in Russia’s Energy Strategy to 2020.

The meeting also addressed the issue of gas quotas to be granted to Severstal in 2005. “Gazprom is unlikely to fully meet Severstal’s gas demand at regulated prices next year, - noted Alexey Miller. He also drew the parties’ attention to the fact that the metallurgical sector was acquiring feedstock, in particular electricity and gas, at Russian internal regulated prices. Taking this into account, Gazprom believes that soaring prices for domestic metallurgical output are unsubstantiated. “This situation is affecting the development of the Russian economy as a whole, - stressed Alexey Miller.

Alexey Mordashov, on his part, expressed hope that the issue of setting the gas price for Russian industrial consumers will be resolved in the course of further consultations as well as informed Gazprom’s Mamagement Committee Chairman of the reasons driving prices for domestic metallurgical output, pointing to their market and cyclic nature. According to Alexey Mordashov, these prices have stabilized so far and are expected to be on a certain decline by the year-end.

Reference:

Severstal is one of the top three Russian and 20 world’s steel makers.

In 2003, Severstal produced 4,146 thousand tons of coke, 7,828 thousand tons of agglomerate, 7,641 thousand tons of cast iron, 9,888 thousand tons of steel and 8,810 thousand tons of rolled iron.

At present, the company is selling domestically 58% of the total rolled iron manufactured.

In 2003, Gazprom supplied Severstal with 2.4 bcm of gas.

DIVISION OF RELATIONS WITH MASS MEDIA