The meeting participants stressed that it was important for Gazprom to use the pricing formula based on the average European prices when purchasing Uzbek natural gas, starting from 2009.

The discussion centered on the possible increase in natural gas purchases from Uzbekistan and the volumes of its transmission via the Republic. The meeting addressed the issues related to the feasibility study preparation for the construction of new gas transmission capacities along the Central Asia - Center gas pipeline corridor within the framework of a joint venture.

Based on the meeting results the parties placed a special emphasis on the uniqueness of the bilateral cooperation in the gas sector and the importance of further developing interaction in hydrocarbon exploration, production and transportation.

Background

The Strategic Cooperation Agreement in the gas industry was entered into by NHC Uzbekneftegaz and OAO Gazprom on 17 December 2002. In particular, the Agreement stipulates long-term purchases of Uzbek gas for the period between 2003 and 2012, Gazprom’s participation in natural gas production projects in the Republic of Uzbekistan under the Production Sharing Agreement terms, as well as cooperation in Uzbekistan’s gas transmission infrastructure development and Central Asian gas transmission across the Republic. Cooperation under the PSA terms in the rehabilitation of gas production from the Shakhpakhty field is a pilot gas extraction project. On 14 April 2004, the project’s PSA terms came into effect. The said project (annual production rate - 0.5 billion cubic meters) opens the way toward implementing a larger gas exploration and production project in Uzbekistan’s Ustyurt region under the identical terms.

On 5 February 2005, Gazprom and Joint-Stock Company Uztransgaz (a sub-holding of NHC Uzbekneftegaz) signed the Mid-Term Agreement on natural gas transmission across the Republic of Uzbekistan over 2006 to 2010. The Agreement pursues the objective of transporting Central Asian, primarily Turkmen, natural gas with the use of the Central Asia - Center (CAC) and Bukhara - Ural gas transmission systems running through the territory of the Republic of Uzbekistan.

Within the frames of the 25 January 2006, Agreement signed between Gazprom and NHC Uzbekneftegaz the work is underway on geological survey of subsurface resources in the Ustyurt region, Republic of Uzbekistan.

On 1 January 2009, Gazprom agreed on the terms of gas supply from Uzbekistan for 2009 and signed an addendum to the Uzbek gas supply contract. The document contemplates using a pricing formula based on average European gas prices.