Alexey Miller, Chairman of the Gazprom Management Committee and Henri Proglio, Chairman and CEO of EDF Group (France) held a working meeting today within the framework of the St. Petersburg International Economic Forum 2011.

The parties discussed the cooperation deepening between the companies in the global energy market as part of the Memorandum of Understanding and considered the prospects for natural gas demand growth in Europe, the environmental aspects of the gas use in the power generation sector and the role played by this type of fuel as the key source of energy ensuring sustainable development in Europe.

The meeting participants noted the expertise and good teamwork of all the South Stream partners stressing that this infrastructural project important for the continent would be accomplished as scheduled.

Background

EDF Group, one of the leaders in the European energy market, is an integrated energy company running such businesses as electricity generation, transmission, distribution, supply and trading. The Group is the leading power producer in Europe.

In January 2008 the South Stream AG joint project company (JPC) was registered in Switzerland. The company was established by Gazprom and Eni on a parity basis.

On November 27, 2009 Gazprom and EDF inked the Memorandum of Understanding envisaging, among other things, possible participation of EDF in constructing the South Stream gas pipeline offshore section.

On June 19, 2010 Gazprom, Eni and EDF signed the trilateral Memorandum providing for specific steps towards the Group entry in the South Stream AG shareholding structure. The Memorandum contemplates that EDF entry will be performed through Eni's stake reduction in the JPC. EDF will hold at least 10 per cent in the project.

On March 21, 2011 Gazprom and BASF SE signed the Memorandum of Understanding on the South Stream project, providing for participation of Wintershall Holding GmbH (a wholly-owned subsidiary of BASF) in constructing the gas pipeline offshore section. The Memorandum identifies that Wintershall Holding GmbH will acquire a 15 per cent stake in South Stream AG, while Gazprom will retain 50 per cent.