The Gazprom Management Committee considered information on the activities related to the development of gas exchange trading and the Mezhregiongaz Electronic Trading Platform (ETP).

The Company’s relevant business units were entrusted as follows:

- to continue cooperation with federal executive authorities on coordination and ratification during this year of the draft Russian Government directive regarding natural gas exchange trading and electronic trading;

- once the Russian Government ratifies the directive on natural gas exchange trading and electronic trading, to elaborate the proposals on the possibility of allocating the required resources in the 2009 Russian Gas Balance and Gas Transmission Scheme in order to sell these resources at the Natural Gas Exchange being established and to develop the Mezhregiongaz ETP.

The meeting noted that Mezhregiongaz had done a lot to improve the electronic trading system in 2008. The integration of hardware and software systems of the ETP with the Gazenergoprombank financial and accounting system allowed the automation of all the operations related to transactions, payments, accounts and guidelines development for gas shipment that resulted in reducing the full cycle from 10 days to 3.5 hours. Mezhregiongaz has almost completed the development of the hardware and software systems for the Natural Gas Exchange trading system.

Background:

Gazprom and independent producers sell gas at the Mezhregiongaz ETP since November 2006 in compliance with the Russian Government Directive “On Experimental Gas Sales via an Electronic Trading Platform” and the Russian Ministry of Industry and Energy Order “On Experimental Gas Trading via an Electronic Trading Platform”.

As part of the experiment Gazprom was entitled to sell up to 5 bcm of gas at free prices. Independent producers could sell the same amount of gas at free prices. Since January 1, 2008 the amount of gas approved for ETP was increased to 7.5 bcm for each party.

It is essential that two structures (ETP and Natural Gas Stock Exchange being established) could efficiently operate supplementing each other. In such a case their functions should be clearly separated.

A provision is made for the Natural Gas Exchange to initially serve the domestic market and then, due to gas transmission facilities expansion and gas markets liberalization in the CIS and EU, the activities will spread onto foreign markets.

The most important structure in exchange trading is an entity that makes clearing payments. Due to the fact that all the transactions should be carried out in compliance with the Russian legislation and in Russian currency, the priority orientation at domestic clearing centres is considered.

One of the most important steps to initiate gas exchange trading was made by the Russian Government when it entitled Gazprom and its subsidiaries as major gas producers and suppliers to sell gas at the exchange at market prices.

With a view to arrange trading of futures and option contracts on commodities and to develop a series of regulatory legal acts, an Interim Working Committee on Exchange Gas Trading was set up by Gazprom.