To promote the Cooperation Agreement sealed, Alexey Miller, Gazprom’s Management Committee Chairman and Kirsan Ilyumzhinov, President of the Republic of Kalmykia have signed today, at Gazprom’s Headquarters, a five-year Gas Supply Contract.

Prior to signing the Contract, the parties addressed the constant natural gas debt growth in the Republic. The Kalmyk authorities’ attention was drawn to the need of submitting full payments for pipeline gas used for the heat and electric power generation.

Under the Contract, the parties will jointly get involved in developing:

- an investment project of gas supplies to the Republic, a general scheme of gas supply and an investment viability report for the gas supply infrastructure construction inclusive;

- a power conservation program for the Republic;

- programs on the motor vehicle & agricultural machinery conversion to compressed and liquefied natural gas.

Promgaz will serve as the general designer for the projects.

Leaning on the investment project of gas supplies to the Republic, the parties together with Mezhregiongaz will build a stage-by-stage program of gas deliveries to the Kalmykia Republic.

Reference:

Gazprom and the Kalmykia Republic entered into the Cooperation Agreement in November 2001.

In 2004, Gazprom provided Republican customers with over 200 mln of gas.

The natural gas supply infrastructure of the Kalmykia Republic is developed by 65% of maximum demand, including by 95.8%, in cities, towns & localities and 44.3%, in rural area. The identical Russia-averaged parameters account for 53%, 60% and 34.7%, respectively.

Over 2005, current and previous gas supplies to the Republic have been paid up at 48.34 and 13.76%, respectively. As of 1 January 2003, the Republican customers’ gas debt to Gazprom totaled RUR 191.65 mln and jumped to RUR 247.58 mln, as of 1 May 2005, RUR 37 mln up on 1 January 2005.

A Gazprom subsidiary, Promgaz specializes in developing comprehensive regional energy saving projects and programs, general schemes of gas supply to the RF constituents, small-sized oil & gas field development projects and coal-bed methane extraction projects.

DIVISION OF RELATIONS WITH MASS MEDIA