‘Naftogaz of Ukraine’ NJSC resumes the Program on Gasification of Autonomous Republic of Crimea

Kyiv, August 28, 2006

On August 26 there was a field meeting of the Ministry of Fuel and Energy of Ukraine Committee on Development of Energy Supply in Autonomous Republic of Crimea and Sevastopol City. It took place in Yalta and was headed by the Ministry of Fuel and Energy of Ukraine Yuriy Boyko. The first Deputy Chairman of the Board of Directors of the Company Volodymyr Yakubenko, members of the Board of Directors and Heads of the Affiliates of ‘Naftogaz’ participated in the meeting on behalf of ‘Naftogaz of Ukraine’ NJSC.

Pursuant to the results of the meeting the Ministry of Fuel and Energy of Ukraine assigned ‘Naftogaz of Ukraine’ NJSC to resume the Program on Gasification of Autonomous Republic of Crimea.

Provided budget funds are allocated (UAH 60 million), structural subdivisions of ‘Naftogaz of Ukraine’ NJSC shall perform a complex of works before the end of 2006. Such works should be aimed at gasification and improving overall social and economic standing of Bilohirsk region (region densely inhabited by repatriates) and eastern districts of Symferopol.

Gasification works shall include construction of pipeline offset Shyroke – Zuya; construction of second branch of pipeline offset up to Gas Distributing Station-2 (hereinafter referred to as the ‘GDS’) of Simferopol City; reconstruction of GDS-2 and construction of medium pressure pipeline GDS-2 – Bile.

Completion of the aforementioned program will allow already in the nearest future to resolve the problem of unequal supply of gas to a number of communities located on the peninsula and provide for supply of gas to the regions of Crimea where the gas service is currently unavailable.

Moreover, the Agreement on Development of Oil and Gas Industry of Crimea in 2006 shall be signed between ‘Naftogaz of Ukraine’ NJSC and the Board of Ministers of the Autonomous Republic of Crimea which will stipulate the construction of the following sites:

- submerged pipeline to urban-type village Noviy Svit;

- pipeline offset and GDS to village Krasnoznamyanka;

- pipeline and GDS to town Stariy Krym;

- pipeline and GDS to urban-type village Azovske.

‘Gasification rates of Crimea fall behind the nation-wide rates. At the same time the increasing demand for energy carriers and electric energy on the peninsula is among the highest in Ukraine. Thus, we recommenced the full-scale gasification of the country from here,’ – stated the First Deputy Chairman of the Company Volodymyr Yakubenko during the Yalta meeting.

‘We consider gasification as not only an element of development of the domestic gas market, yet also in the context of improving the living standards of our fellow citizens – noted Yakubenko. – Thus gasification is and will be among the priorities of ‘Naftogaz of Ukraine’ activities.

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