Headed by Alexey Miller, Chairman of Gazprom's Management Committee, the Company’s delegation has paid a working visit to Turkey, meeting with Mehmet Hilmi Guler, Turkish Energy & Natural Resources Minister.

The Turkish side expressed its satisfaction with the fact that during the severe frost Gazprom provided Turkey with extra gas for meeting increased demand.

The parties discussed the prospects for collaboration in the gas sector. In particular, a focus fell on deliveries of Russian gas and development of underground gas storage facilities.

The meeting also addressed the issue of implementing projects on gas transmission via Turkey to third countries: to Greece and southern Italy as well as Israel and other countries of the Near East. The parties agreed to discuss matters concerning the foundation of a joint venture for those projects.

In addition Alexey Miller and Mehmet Hilmi Guler discussed issues in relation to Gazprom’s participation in gas marketing to Turkish end consumers and gas transmission & gas distribution infrastructure development in Turkey.

The parties also reviewed matters surrounding the Samsun-Ceyhan oil pipeline.

To fulfill all the above tasks, the parties agreed to set up a joint Working Group and to hold the next meeting in spring 2006.

Reference:

Russian-Turkish cooperation in the gas industry began back in 1984 when the Governments of the Turkish Republic and USSR entered into an Agreement on natural gas supplies to Turkey. A total of some 138.7 bcm of natural gas delivered by the Trans-Balkans and Blue Stream gas pipelines was exported from Russia to Turkey between 1987 through 2005.

The Blue Stream gas pipeline is an addition to the existing gas transmission corridor from Russia to Turkey via the Ukraine, Moldavia, Romania and Bulgaria. Gas shipments by Blue Stream substantially bolster the reliability of gas supplies to Turkey and establish additional pre-requisites for said country’s gas market and infrastructure development. In 2004 and 2005, Blue Stream carried over 3.2 and 5 bcm of Russian gas, respectively, with 6-6.5 bcm scheduled for 2006.

Russian gas exports to Turkey have been on an annual rise, reaching 14.5 bcm and over 18 bcm in 2004 and 2005, respectively.

On 6 December 2004, Gazprom and the BOTAS Petroleum Pipeline Corporation inked a Memorandum on cooperation deepening in the gas sector. The Memorandum outlines the possibility of (direct or through subsidiaries) deliveries of Gazprom’s gas to Turkish end-use consumers as well as potential joint involvement in gas supply & distribution and underground gas storage & gas-driven power plant development projects in Turkey.

A natural gas import monopolist, the BOTAS Petroleum Pipeline Corporation was established as an affiliated company of Turkish Petroleum Corporation (TPAO) in August 1974. BOTAS’ major businesses are oil & gas production and transmission, marketing survey and energy supply to end customers. In pursuance of the Gas Market Liberalization Law adopted by Turkey in 2002, BOTAS hands over part of its competitive contracts on natural resource imports to other energy firms.