In light of several inaccurate statements reported by the media in the past months with respect to the Company’s intention to build a polyethylene plant, NOVATEK would like take this opportunity to make an official statement:

The “Project” is the planned construction of a Petrochemical Complex (PCC) in Novokuibishevsk. The PCC will be a modern facility which will produce high quality petrochemical products. The PCC will allow NOVATEK to expand its participation in the hydrocarbon value chain by, supplying the PCC with feedstock produced at Company fields and taking advantage of the favorable climate for the petrochemical industry in Russia.

One of the largest German banks, Commerzbank AG, together with the German government supported export credit agency, Oiler Hermes, have shown an interest in providing financial support and coverage for the “Project”.

Currently the Company is reviewing various issues relating to the “Project” including; technical issues, capital investment requirements and possible sources of financing (credit or project finance). Once these issues are finalized the “Project” will be considered by NOVATEK’s investment committee and final approval will be at the discretion of the Executive Board. The project will be implemented only after application to the RF government for approval and investment allowances.

The PCC is designed to produce the following products:

- Polyethylene – up to 400 thousand tons per year including hot water pipes, pipelines, ultra-fine plastic packaging products etc.

- Polypropylene – up to 200 thousand tons per year including a strike proof product used in hi-tech construction materials as well as special fiber, filament and non-woven fabric.

- Benzene, methyl benzene and other marketable petrochemical products –aggregated up to 200 thousand tons per year.