The Gazprom Headquarters today has hosted a working meeting of Alexey Miller, Chairman of the Gazprom Management Committee, Bakhytkolzha Izmukhmambetov, Energy Minister of the Republic of Kazakhstan and Uzakbai Karabalin, President of KazMunayGas National Company.

The parties examined the potential for cooperation in the gas sector, placing a focus on a Russia-Kazakhstan joint venture to be potentially set up between Gazprom and KazMunayGas on the platform of the Orenburg Gas Processing Plant. Accordingly, the parties discussed issues in relation to a long-term contract for the supply of gas from the Karachaganak field to the Orenburg Gas Processing Plant as well as an agreement contemplating deliveries of processed gas to Kazakhstan.

The meeting also deliberated on the issue of entering into a contract for Kazakhstan’s gas over 2007.

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The Republic of Kazakhstan possesses some 2 tcm of the explored natural gas reserves, with the undiscovered natural gas resources, including the Caspian offshore potential, valued at 8.3 tcm.

In recent years domestic gas production and consumption in Kazakhstan has annually averaged 12 and 5 bcm, respectively. Pursuant to a development program for Kazakhstan’s gas industry, by 2020 gas extraction is scheduled to be boosted to 40 bcm per year, with exports to potentially increase as well.

Cooperation between Russia and Kazakhstan in the gas business is being regulated by the following Inter-Governmental Agreements for: Cooperation and Development of Fuel and Energy Complexes, dated December 25, 1993 (annually signed Protocols apply); Technical & Economic Cooperation and Integration in the Oil and Gas Industries, dated February 25, 1997; Cooperation in the Gas Industry, dated November 28, 2001.

In June 2002, Gazprom and the KazMunayGas National Company founded the 50/50 Kazakhstan-based KazRosGaz joint venture dealing with natural gas procurement, marketing and processing at Russian plants as well as with other activities.

The bilateral cooperation between Gazprom and Kazakhstan’s companies hinges on the following major joint businesses:

• processing of the Karachaganak gas condensate field feedstock at the Orenburg Gas Processing Plant
• services provided by Gazprom’s affiliates to ensure Kazakhstan’s gas transit across the Russian Federation to the CIS
• supply of Russian natural gas to Kazakhstan’s Kostanai province
• transit of Central Asian gas through the Republic of Kazakhstan in increasing volumes as stipulated by existing long-term agreements

In July 2006, the Gazprom Management Committee considered it worthwhile to create a Gazprom and KazMunayGas’ 50/50 joint venture on the platform of the Orenburg Gas Processing Plant. The joint venture creation issue is pending approval by the Gazprom Board of Directors.