The Gazprom headquarters hosted today a working meeting between Alexey Miller, Chairman of the Company's Management Committee and Paolo Scaroni, Chief Executive Officer of Eni.

The meeting focused on discussing construction of the South Stream gas pipeline. The parties expressed a unanimous opinion that the project was progressing in strict compliance with the prescribed deadline.

In addition, the meeting participants discussed the issues surrounding accession of EDF and Wintershall Holding to the shareholding structure of the joint project company responsible for the offshore section of the South Stream project.

The parties also discussed coordination of the agreement on natural gas purchase from SeverEnergia.

Background

Italy is one of the major importers of Russian gas in Europe. Gazprom and Eni have established a long-standing partnership.

In 2010 the amount of gas supplied by Gazprom to Italy was equal to 13.05 billion cubic meters.

The year of 2009 was the 40th anniversary of the contract on natural gas supplies to the Apennine Peninsula, signed between Eni and the Foreign Trade Ministry of the USSR.

In November 2006 Gazprom and Eni entered into the Strategic Partnership Agreement. Under the Agreement the existing contracts for Russian gas supplies to Italy were extended till 2035. Starting from 2007 Gazprom began to directly supply the Italian market with natural gas in the amount of up to 3 billion cubic meters a year and was entitled to acquire stakes in Eni's international assets.

On January 18, 2008 the special purpose entity South Stream AG was registered in Switzerland by Gazprom and Eni on a parity basis.

On June 19, 2010 Gazprom, Eni and EDF entered into the trilateral Memorandum providing for specific steps towards the French company's entry in the shareholding structure of the joint project company.

On March 21, 2011 Gazprom and Wintershall Holding GmbH signed the Memorandum of Understanding on the South Stream project, providing for participation of the German company in constructing the gas pipeline offshore section.

Yamal razvitiye (owned by Gazprom neft and NOVATEK on a parity basis) holds a 51 per cent stake in SeverEnergia with the remaining 49 per cent owned by Arctic Russia B.V., a joint venture of Italian Eni (60 per cent) and Enel (40 per cent).

SeverEnergia fully owns Arcticgaz, Urengoil Inc. and Neftegaztekhnologia. The companies hold subsurface licenses for oil and gas fields in the Yamal-Nenets Autonomous Okrug: the Samburgsky, Yevo-Yakhinsky, Yaro-Yakhinsky and Severo-Chaselsky blocks. Their ABC1 + 50% C2 reserves amount to 919 billion cubic meters of gas, 330 million tons of oil and 109 million tons of condensate.