NaftoGaz Ukrainy NJSC Implementing HRYVNIA Project to Optimize Residential Gas Consumption

Kyiv, October 9, 2006

NaftoGaz Ukrainy NJSC has started preparations for the implementation of the HRYVNIA project (gas revenue implementation in Ukraine) that envisages mass installation of domestic gas meters Gallus 2002 for metering gas consumed by residents.

The project is expected to bring down the volumes of natural gas consumed by the population by 4-5 billion cu m annually and make it possible to reduce the subsidies amounting to Hr 70 million that have been allocated for residential consumers to compensate for natural gas they actually consume.

The HRYVNIA project is to be implemented in association with ACTARIS Ukraine, a company with which NaftoGaz Ukrainy NJSC has signed a memorandum of understanding.

The objective of the project based on the TALEXUS system from АCTARIS is to optimize residential gas consumption. As a result, consumers will get better service, the volumes of natural gas they consume will be accurately measured and any potential debts for consumed gas will be prevented. The average payback period of the system is three years.

The core tasks to be accomplished by the HRYVNIA project are:

· to equip homes that have gas supply with domestic gas meters featuring electronic modules;

· to create infrastructure of accounting for natural gas supplied to residents and gas consumption payments;

· to organize reliable and accurate accounting for consumed gas at gas supplying companies while reducing their staff (inspectors) and employee allowances;

· to intensify consumer payments and establish conditions ruling out any natural gas debts through the introduction of 100 percent advance payments.

The HRYVNIA project is to be realized in execution of a decision by the Cabinet of Ministers on measures to be taken to introduce 100 percent prepayments to be made by consumers for natural gas as envisaged in clause 6 of Resolution No 605 of the Cabinet of Ministers of Ukraine, dated April 29, 2006.

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