The Gazprom headquarters hosted a working meeting of Alexander Ananenkov, Deputy Chairman of the Company’s Management Committee with Members of the Shtokman Development AG Board of Directors – Arnaud Breuillac, Total’s Senior Vice-President for Central Europe and Continental Asia, and Torgeir Kydland, Statoil’s Senior Vice-President for Eurasia, Middle East and Asia.

The parties addressed the progress with the preparations for the Shtokman field development. Particular attention was paid to the issues related to the development of Phase 1 Schedule taking into account the decisions taken at the Shtokman Development AG Board of Directors meeting on February 5, 2010.

Background:

The Shtokman field is situated in the central part of the Russian sector of the Barents Sea.

The field’s C1 reserves make up 3.9 trillion cubic meters of gas and 56 million tons of gas condensate, with 3.8 trillion cubic meters of gas and 53.3 million tons of gas condensate located within Gazprom’s licensed area.

The Shtokman gas and condensate field development project is of strategic importance for Gazprom. The field will become a resource base for deliveries of Russian gas – both by pipeline and in the form of LNG – to the Atlantic basin markets.

Gazprom neft shelf (former Sevmorneftegaz), a wholly owned subsidiary of Gazprom, holds the gas and gas condensate exploration and production license for the Shtokman field.

Gazprom partners with Total (France) and StatoilHydro (Norway) in the Shtokman project execution.

In February 2008 Gazprom, Total and StatoilHydro signed the Shareholder Agreement on establishing Shtokman Development AG, a special-purpose company to engineer, develop construct, finance and operate the Phase 1 facilities intended for the Shtokman field development.

The special-purpose company will own the Phase 1 infrastructure of the Shtokman field for 25 years, starting from the field commissioning date.

On February 5, 2010, taking into account the changes in the market situation, particularly, on the LNG market, the Shtokman Development AG Board of Directors decided to single out the construction of the Startup Facility for Pipeline Gas Supplies (an offshore production facility, a pipeline ashore and a gas treatment unit) into a separate stage within Phase 1. The final investment decision (FID) on pipeline gas production is planned to be taken in March 2011 and the FID on LNG production – before the end of 2011 (Phase 2). Such an approach will enable to launch pipeline gas and LNG production in 2016 and 2017 accordingly.