The Management Committee took into account the information relevant to Gazprom Group’s activities in the North American market.

For the purpose of implementing LNG Production and Supply Strategy and enhancing the status of Gazprom Group as a global energy holding, the Company’s specialized subdivisions were entrusted with fortifying its positions on the gas and power generation markets of North America.

The issue of Gazprom Group’s participation in North American gas and power generation projects will be introduced for consideration by Gazprom Board of Directors.

Background:

The USA is the world’s largest gas market, Canada is the fourth-largest and Mexico is the twelfth-largest. The North American countries account for 28 per cent of the total global gas consumption.

Around 83 per cent of the US natural gas demand is satisfied through domestic production, 14 per cent is imported via gas pipelines and 3 per cent arrives in the form of LNG. Gas production in Canada surpasses the domestic consumption twofold, and the remaining gas is exported to the USA. Domestic production in Mexico covers most of the country’s demand.

The annual capacity of regasification terminals in the North American markets (including the terminals under construction) totals 200 billion cubic meters.

The North American gas market has the following benefits:

- high liquidity rates;

- multiple regasification terminals on the supply side and advanced gas transportation infrastructure;

- gas prices reflect the actual balance of supply and demand;

- cost-intensive development of indigenous gas reserves will subsequently sustain a high level of prices on the market;

- development of gas-powered energy facilities provokes the increased demand for this kind of fuel.

North America is a target consumer within the LNG Production and Supply Strategy approved by Gazprom Board of Directors in March 2008. The document provides for Gazprom’s activities in liquefaction, sea-borne transportation, regasification and distribution sectors.

Gazprom Group is going to supply substantial LNG volumes to the North American market from two Russian projects: Sakhalin II and Shtokman development project.

Access to the power generation market of North America will increase gas sales efficiency and diversify market risks. In addition, participation in the power generation sector will improve market operations through the “gas-power generation” optimization.

The prospects for expanding Gazprom Group’s presence in the North American market are linked with the following areas:

- regasification terminals;

- gas marketing ;

- hydrocarbon business.