28th Jun 2012 12:44
NOVATEK AND MMK EXECUTE LONG-TERM GAS SUPPLY CONTRACT
Moscow, 28 June 2012. OOO NOVATEK Chelyabinsk, a wholly-owned subsidiary of OAO NOVATEK ("NOVATEK" or the "Company"), announced today the execution of a long-term natural gas supply contract with OAO MMK ("MMK"). The gas supply contract has been signed for a period of 10.5 years until 31 December 2022, and it is estimated that the total volume of natural gas supplied over this period will exceed approximately 50 billion cubic meters ("bcm"). The Company will deliver approximately 2.3 bcm of natural gas during the second half of 2012 to MMK, with volumes expected to be increased to 4.5 bcm in 2013.
"The execution of the 10-year gas supply contract with MMK sets a new precedent in consumer-supplier relations, enabling both companies to establish and implement our respective production plans on a mutually beneficial basis over a long-term perspective. Our marketing policy is aimed at building stable relationships with our partners, and NOVATEK's resource base allows us to guarantee the reliability of natural gas deliveries", stated Mikhail Popov, NOVATEK's First Deputy Chairman of the Management Committee.
MMK's Deputy General Director Vitaly Bakhmetyev noted: "In 2003, NOVATEK began to supply natural gas to MMK with an annual volume of 500 million cubic meters of gas. The contract we have signed today meets the interests of both parties and ensures the energy security of MMK Group for more than 10 years. NOVATEK is a reliable partner and we are happy to establish long-term bilateral relations between our companies".
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OAO NOVATEK is Russia's largest independent gas producer and the second-largest natural gas producer in Russia. Founded in 1994, the Company is engaged in the exploration, production, processing and marketing of natural gas and liquid hydrocarbons. The Company's upstream activities are concentrated in the prolific Yamal-Nenets Autonomous Region, which is the world's largest natural gas producing area and accounts for approximately 84% of Russia's natural gas production and approximately 17% of the world's gas production. NOVATEK is an open joint stock company established under the laws of the Russian Federation. The Company's shares are listed in Russia on MICEX-RTS Stock Exchange and the London Stock Exchange (LSE) under the ticker symbol "NVTK" and on the NASDAQ PORTAL System as Rule 144A GDR under the ticker symbol "NVATY".
MMK is among the world's largest steel producers and is one of the leaders of Russia's steel industry. The company's operations in Russia include a large steel producing complex encompassing the entire production chain, from preparation of iron ore to downstream processing of rolled steel. MMK turns out a broad range of steel products with a predominant share of higher value added products. In 2011 MMK Group produced 12.2 mln tons of crude steel and 11.2 mln tons of commercial steel products. MMK Group revenue in 2011 stood at USD 9.306 bln, EBITDA at USD 1.336 bln.
Copyright Business Wire 2012
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