The Board of Directors’ meeting is underway at the Gazprom Headquarters.

The Board of Directors ratified the gas pricing policy implemented by Gazprom for the former Soviet Union.

The Company’s Management Committee was tasked with further stepping up actions to maintain market based approaches towards pricing initiatives in the gas trading business with FSU.

Reference:

At present, Gazprom is implementing the phased policy of bringing gas prices for the CIS countries to an equilibrium level (taking account of transmission distances) with gas prices for European customers. The move will ensure equal returns on natural gas exports from Russia. This strategy has led to a considerable (two/three fold) increase in the value of gas for all of the former Soviet Union consumers (except the Republic of Belarus) in 2005.

The gas price for FSU should cover gas production, treatment and transmission expenses as well as produce a profit commensurate with the profit realized from gas sales in West Europe.

The Gazprom gas pricing policy for FSU when supplying Russian and Central Asian natural gas based on its market value assessment is characterized by the following principles:

• Phased transition to European gas price levels;
• Division of contracts by business type: gas purchase/sale and transmission;
• Taking account of the regional specificity in the relations with counterparties.