A Framework Agreement on the Main Conditions of cooperation at the first phase of Shtokman gas condensate field development was signed today at the OAO Gazprom Head Office by Alexander Ananenkov, Acting Chairman of the Gazprom Management Committee, Christophe de Margerie, President of Total S. A. holding, and Yury Komarov, Director General of Sevmorneftegaz.

Under the Agreement, the parties will establish a special-purpose company to manage engineering, financing, construction and exploitation of installations at the first phase of Shtokman field development. The company will be the owner of this infrastructure during 25 years, starting from the moment the field is put on stream.

The Gazprom stake in the new company’s authorized capital will be 75 per cent, while Total will receive 25 per cent. Upon completion of the exploitation period of Shtokman’s first phase, Total will hand over its stake to Gazprom.

The Agreement envisions a possibility to attract other international partners with the cumulative involvement up to 24 per cent, with a respective change of the Gazprom stake to 51 per cent.

100 per cent of shares in the company holding the license for the Shtokman field (i.e. Sevmorneftegaz), as well as all the rights for marketing of the commodities will be retained by Gazprom.

At the initial development phase it is envisioned to produce 23.7 bcm of natural gas per year, with startup of gas deliveries via the pipeline in 2013, and LNG supply - in 2014.

Relations between the special-purpose company and Sevmorneftegaz will be governed by a contract, by which the new company will bear all financial, geologic and technical risks involved in extraction of natural gas and condensate, as well as in LNG production.

In was agreed to begin the teamwork on the project implementation in July of the current year.

Reference:

Sevmorneftegaz company (a 100 per cent affiliate of Gazprom) holds the license for prospecting, geological studies and production of natural gas and gas condensate at the Shtokman field, and acts as the sole customer for engineering and construction of all installations for the field development: production complex, pipelines and LNG production complex.

Total is a major world-class energy company. Its sphere of activities covers more than 130 countries and encompasses all components of the oil-and-gas production chain, from production to sales of processed commodity to end users.

The sphere of activities of Total includes transportation and storage of natural gas, as well as electrical power generation at the combined cycle gas turbine power plants and use of renewable energy sources. Total activities also encompass the sphere of marketing and realization of natural gas, electrical power, LNG, LPG and coal.

Shtokman field is located at the central part of shelf of the Russian segment of the Barents Sea.

As confirmed by the State Commission on Mineral Reserves of the Ministry for Environment Protection and Natural Resources of the Russian Federation in January 2006, reserves of the field in categories ?1+?2 amounted to 3.7 bcm of natural gas and over 31 million tons of gas condensate.

In October 2006 the Gazprom Management Committee decided to give priority to the pipeline gas deliveries from Shtokman gas condensate field to the European market. It was determined that Shtokman field would become the resource base for the Russian gas exports to Europe via the North Stream gas pipeline.