Actuality, November, 13, 2007

Gazprom plans to enter the European power market by constructing two power stations in Germany, moreover close to the end point of Nord Stream gas pipeline. The projects are carried out in cooperation with German E. On energy corporation.

Both parties admit that entry receiving to the German market could be the main part of prolonged deal of E.On. entery to the project of South-Russian deposit development.

Alexander Medvedev, the deputy manager of Gazprom, has informed in the interview to the German newspaper Frankfurter allgemeine Zeitung that the monopoly is going

to construct two power stations in Germany that will be supplied with gas through the Nord Stream gas pipeline.

In particular, Gazprom Germania (Gazprom subsidiary) views a German city Eisenhüttenstad of Brandenburg land as the platform.

Electric power of this power station is kept in secret. The shares in the power station will be allotted to “Gasprom” and Luxembourg Soteg on equal rights if the construction will be approved. The second power station is planned to be constructed in the resort city of Lubmin on Baltic Sea.

Its electric power will be about 1 GW. German E.On energy corporation will be a partner in this project (it also owns 20 % of Soteg).

Nord Stream is a mutual project of Russian Gazprom (51 % stocks of the project operator) and German BASF and E.ON Energie. The Dutch company Gasunie participates in this project also. By Octo ber, 1, 2010 the first pipeline with a power of 27,5 bcm of g as per year should

be laid on the seafloor of Baltic Sea from Vyborg up to German Greifswald. The second one with the same power should be finished by 2012.

Woolf Bernotat, the E.On. top-manager, informed in the end of October that the matter on power station arrangement (either close to the end point of Nord Stream gas pipeline or in the center of Germany) was still open. It is planned to construct two pipe branches.

They are OPAL (from Greifswald to Olbernhau) and NEL (from Greifswald to Bremen) that will be connected with the German gas transmission system.

According to the top-manager,

the power station can be constructed close to the one of the pipe branches.

According to Woolf Bernotat, construction of the power station is discussed with Gazprom within

the transaction of German corporation participation in the project of South-Russian deposit development. Proved resources are more than 700 mcm of gas.

Mister Bernotat has also added that E.On. negotiates with Gazprom about power stations construction in Italy and Great Britain.

The negotiations about E.On. entery to the project (German BASF already participates in it) have been carrying on for several years, but the corporation can’ t coordina

te the assets for exchange with Gazprom.

Power stations in Europe can become the key point in these negotiations.

Earlier Gazprom tried many times to negotiate with the final users in Europe and Great Britain, including

the attempts of buying the power assets. Still, Gazprom faced the resistance of the European Union and some other countries’ authorities. The analysts consider that the very access to the market can become the key point of negotiations between Gazprom and E.On. The price of one power station construction is estimated at $1 bln. It is still unknown how the investments will be distributed among the partners.