The Board of Directors took notice of the information on the current status and the progress with implementing the South Stream project.

The meeting noted that the project was progressing on schedule. Late 2015 is scheduled for the gas pipeline’s first string commissioning.

The Company’s Management Committee was tasked to continue the work and inform the Board of Directors about the project implementation in the fourth quarter of 2010.

Background:

The South Stream project is implemented with a view to diversify the routes of natural gas supply to European consumers and envisages construction of a gas pipeline running under the Black Sea to the countries of Southern and Central Europe.

A provision is made to gradually build up the South Stream capacity. The projected throughput capacity of the South Stream offshore section will reach a total of 63 billion cubic meters per year.

Intergovernmental agreements were signed with Bulgaria, Serbia, Hungary, Greece, Slovenia, Croatia and Austria in order to implement the project’s onshore section beyond Russia.

At present, the South Stream Consolidated Feasibility Study is being elaborated including the studies for the offshore section and for the respective gas pipelines in the countries of Southern and Central Europe.