Finalization of the matter of cooperation between Gazprom OJSC and Naftogaz Of Ukraine NJSC in the gas domain

Gazprom OJSC and Naftogaz Of Ukraine NJSC finalized the matter of cooperation and switched to market principles of joint work in the gas domain.

The parties agreed that, from January 1, 2006, Gazprom will deliver gas to RosUkrEnergo at a price formula, which fixes an initial price at 230 USD/1,000 cbm. Gazprom and RosUkrEnergo signed a respective long-term contract for a five-year term.

Since RosUkrEnergo’s gas balance contains Central Asian gas, RosUkrEnergo will sell the gas to Ukraine at the Russian-Ukrainian border at a price of January 1, 2006 equal to 95 USD/1,000 cbm.

The rate for Russian gas transit through Ukraine is equal to 1.6 USD/1,000 cbm per 100 km as agreed.

The cost of gas to be sold by RosUkrEnergo in Ukraine and the rate for Russian gas transit through Ukrainian territory will be paid in cash.

The contract signed allowed the parties to state that the deal was reached on mutually beneficial terms and is a good basis for development of cooperation between Russia and Ukraine in the gas sphere on the basis of market principles.

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