Press Conference Background

GAZPROM IN EASTERN RUSSIA, ENTRY INTO ASIA-PACIFIC MARKETS

(June 13, 2013)

In 2012 Gazprom made great efforts to implement the projects under the Development Program for an integrated gas production, transportation and supply system in Eastern Siberia and the Far East, taking into account potential gas exports to China and other Asia-Pacific countries (Eastern Gas Program).

Resource Base Buildup in Eastern Russia

At present, Gazprom carries out geological exploration activities offshore the Sakhalin Island, in the Republic of Sakha (Yakutia), the Irkutsk Region and the Krasnoyarsk Territory.

Geological exploration was completed at the Kirinskoye field developed as part of the Sakhalin III project. The field is fully prepared for commercial development. Prospecting goes on at the Yuzhno-Kirinskoye field, the Vostochno-Odoptinsky and Ayashsky blocks of the project.

In 2012 the geological exploration of the Chayandinskoye field in the Republic of Sakha (Yakutia) resulted in the addition of 74.8 billion cubic meters of gas to the C1 reserves. The field prospecting will be completed in 2015.

Follow-up exploration projects are developed for the Sobolokh-Nedzhelinskoye, Verkhnevilyuchanskoye, Tas-Yuryakhskoye and Srednetyungskoye fields located in the Republic of Sakha (Yakutia). Prospecting continues there.

Geological exploration is also in progress at the Kovyktinskoye field in the Irkutsk Region, where engineering and survey operations are nearing completion on gas wells slated for construction in 2014. Gazprom commenced the design work on these wells.

Gazprom continues prospecting operations at 18 licensed blocks in the Krasnoyarsk Territory.

Developing Production and Gas Transmission Capacities in Eastern Russia

Construction & installation activities are finished at a deepwater production facility as part of the Kirinskoye field pre-development process. Operations for connecting the first production well to a gas gathering system are nearing completion. Buildings and installations are ready at the onshore processing facility (OPF), the main process equipment is assembled. Pre-commissioning work is underway.

1

A gas pipeline connecting the OPF to the Sakhalin main compressor station was built at the Sakhalin – Khabarovsk – Vladivostok gas transmission system in order to supply gas from the Kirinskoye field. Hydraulic testing and gas feeding operations are over, pre-commissioning is underway.

Pre-development work is in progress at the Chayandinskoye field in the planned Yakutia gas production center.

The Chayanda – Lensk main section was designed as part of the Power of Siberia gas trunkline project. Design & survey operations continue at the Lensk – Belogorsk – Blagoveshchensk and Belogorsk – Khabarovsk sections.

Design & survey work is completed for the first and second phases of the oil rim pre- development at the Chayandinskoye field during a period of pilot commercial operation. The project is approved by state experts.

Large-scale construction within the Yakutia gas production center project will start as soon as agreements are reached with potential customers.

Design & survey operations are in progress in the Irkutsk Region for the Kovyktinskoye field pre-development during a period of pilot commercial operation. Design documents are being adjusted for the Chikanskoye field pre-development.

In 2012 construction & installation activities were finished at the Kshukskoye and Nizhne-Kvakchikskoye fields as part of the project for gas supply to the Kamchatka Territory. This will make it possible to bring these fields to an aggregate annual capacity of 750 million cubic meters of gas.

Gas Processing

The Amur Region will see the construction of gas processing and helium production facilities to be fed from the Yakutia and Irkutsk gas production centers. By now, Gazprom has launched design & survey operations under the Gas Processing and Helium Production Facilities in Belogorsk project. In 2013 design specifications were approved and a general project company was identified.

Regional Gasification and Natural Gas Market Development

The work continues on the gasification of the Primorye, Khabarovsk, Kamchatka Territories and the Sakhalin Region under approved programs for gas supply to and gasification of the Far Eastern Federal District areas.

In the Primorye Territory investments will be made into the development of design & estimate documents for seven gas pipeline branches, seven gas distribution stations and eight inter-settlement gas pipelines from the new gas distribution stations. Design & survey operations are planned to be completed in 2013.

2

In the Khabarovsk Territory investments will be made into the construction of nine gasification facilities. Construction & installation operations (taking into account consumer readiness to receive gas) are planned to be completed in 2014.

In the Sakhalin Region investments will be channeled into the construction of four gasification facilities. Construction & installation operations (taking into account consumer readiness to receive gas) are planned to be completed in 2014.

In the Kamchatka Territory investments will be channeled into the construction of four gasification facilities. Construction & installation operations (taking into account consumer readiness to receive gas) are planned to be completed in 2014.

At the moment, Gazprom is working on the Investment Rationale for a comprehensive project aimed at gas supply to southern areas of the Irkutsk Region, including the construction of gas processing and gas chemical facilities.

In 2012 Gazprom jointly with the executive authorities of the Primorye and Khabarovsk Territories and the Sakhalin Region developed and approved seven-year (2014 to 2020) programs for the conversion of motor transport and agricultural machinery to gas. A draft program for the Kamchatka Territory is under review by the Territory’s authorities.

In 2012 the design work was finished and equipment was delivered for the CNG filling station No. 1 in Petropavlovsk-Kamchatsky. At present, the work is underway on the selection and approval of a land plot for a CNG filling station in Yelizovo.

The selection of land plots for the construction of two CNG filling stations is in progress in Khabarovsk and Yuzhno-Sakhalinsk. Design operations will be performed in 2013, construction is scheduled for 2014.

Sakhalin II Project and LNG Sales Abroad

In 2012 gas, oil and condensate production as part of the Sakhalin II project totaled 17.3 billion cubic meters, 3.8 million tons and 1.6 million tons accordingly. 5.5 million tons of oil and 10.8 million tons of LNG were offloaded.

In the first quarter of 2013 a total of 4.9 billion cubic meters of gas, 0.87 million tons of oil and 0.44 million tons of condensate were produced under the Sakhalin II project. 1.4 million tons of oil and 3.1 million tons of LNG were offloaded.

In 2012 Gazprom Group delivered 22 LNG cargoes with a weight of 1.3 million tons to the Asia-Pacific market. LNG from the Sakhalin II project accounted for some 40 per cent of Gazprom Group’s total portfolio.

Vladivostok-LNG Project

In February 2013 an investment decision was made regarding the construction of an LNG plant near Vladivostok. Phase one includes two process trains with an annual 3

capacity of 5 million tons of LNG each. In future, the third process train with the same annual capacity of 5 million tons may be built.

In March 2013 approval was given to the Action Plan for the LNG plant construction near Vladivostok. The first process train is planned to be brought onstream in 2018 and the second one – in 2020.

Gas from the Sakhalin gas production center as well as the Yakutia and Irkutsk centers will serve as the resource base for the plant.

The sales markets for LNG from the Vladivostok-LNG project are the Asia-Pacific countries, primarily Japan. At present, commercial talks with potential LNG buyers are underway.

The scope of LNG production in the Far East will be determined only by the demand in a target sales market, first of all, in Asia-Pacific. In future, the LNG plant capacity may be boosted on the back of growing LNG demand.

Gazprom in Asia-Pacific Gas Market

In September 2012 Gazprom and the Agency for Natural Resources and Energy under the Japanese Ministry of Economy, Trade and Industry signed the Memorandum on the Vladivostok-LNG project. The relevant work is underway with potential Japanese buyers in respect of LNG supplies under this project.

Possible LNG supplies are being negotiated with other Asia-Pacific countries in order to sign contracts for the bulk of Vladivostok-LNG gas.

At present, commercial talks are in progress with potential gas buyers from South Korea and China. During the visit of the PRC President Xi Jinping to Russia in March 2013 Gazprom and CNPC signed the Memorandum of Understanding on the cooperation between the two companies within a project for pipeline gas supplies to China.

The negotiating process progresses successfully and Gazprom expects the first contracts on LNG and pipeline gas supplies will be signed this year.

Creating Enabling Conditions for Gas Industry Development in Eastern Russia

Gazprom is engaged in developing the measures of state support aimed, inter alia, at creating an enabling tax regime for projects in Eastern Russia.

The thorough measures of state support to oil and gas companies in Eastern Russia are to be transcribed into Russian laws on taxes and levies as well as in the draft Federal Law on the Far East Development.

When executing the Eastern Gas Program, Gazprom jointly with the Russian Energy Ministry developed an updated draft Action Plan on mitigating risks and creating 4

conditions for further implementation of the Eastern Gas Program. The document is currently under review at the Russian Presidential Commission for Strategic Development of the Fuel & Energy Sector and Environmental Safety. The draft Action Plan contains comprehensive measures of state support in customs & tariff and tax regulation areas with a view to encourage independent subsurface users and gas producers.

On March 29, 2013 the Russian Government approved in its Directive No. 466-r the state-run Program for Socioeconomic Development of the Far East and the Baikal Region.

Taking into account the lack of advanced transport and energy infrastructure in the region, the adjusted version of the Program should include:

 the construction of a combined road and rail bridge crossing over the Amur River near Blagoveshchensk;  the upgrade of infrastructure along the M-58 (Amur) federal road at the Blagoveshchensk – Khabarovsk section as well as the M-60 (Ussuri) federal road at the Khabarovsk – Vladivostok section.

These facilities are highly significant for establishing and developing gas processing, helium and gas chemical businesses in the Amur Region.

5