Gazprom’s Management Committee hosted today a working meeting between Alexey Miller, Chairman of the Company’s Management Committee and Oleg Dubina, Chairman of the Board of NAK Naftogaz Ukrainy.

The parties discussed the progress in implementing long-term contracts for gas transit and supply placing special emphasis on the issue regarding the payment for the current gas supplies by the Ukrainian side as well as the necessity for Naftogaz Ukrainy to replenish UGS facilities in order to be able to meet its obligations on gas transit and supply during the 2009-2010 heating season.

Background:

On January 19, 2009 Gazprom and NAK Naftogaz Ukrainy signed separate long-term contracts for Russian gas transit to Europe via Ukraine and for gas supply to Ukraine’s consumers. The contracts are effective from 2009 through 2019.

The transit contract stipulates retaining in 2009 the beneficial transit rate of USD 1.7 for the transportation of 1,000 cubic meters per 100 kilometers. From January 1, 2010 the transit rate will be market based and will be calculated according to a generally accepted European formula.

Pursuant to the contract for gas supply to Ukraine, the price of gas for Ukraine’s consumers is calculated using the generally accepted European formula with the discount rate of 0.8. The price will be quarterly adjusted on the basis of the formula. From January 1, 2010 Gazprom will start selling gas to Ukraine at the European market price with no discounts.