Agency WPS
The Russian Oil and Gas Report (Russia)
August 23, 2004, Monday

ITERA QUITS THE CIS AND FOCUSES ON DEEP GAS PROCESSING

Over the first seven months of 2004, gas supplies of ITERA to the CIS
decreased by more than 80%. ITERA does not plan to restore the gas
export contracts. Instead, the company started searching for
financing for its new projects of deep hydrocarbon processing.

Between 2003 and 2004, Gazprom took from ITERA and regained the
markets of Ukraine, Moldova and Baltic republics. In 2003, Gazprom
started gas supplies to Armenia and in 2004 to Azerbaijan. In the
last six months, Gazprom actually ousted independent gas suppliers
from the market.

In 2004, ITERA reduces the gas sales target figure from 28.7 billion
cubic meters to 19.1 billion cubic meters. The PR service of ITERA
reports that there is no decrease of gas production. The company
sells all gas produced in Russia in the Sverdlovsk Region. Press
secretary of ITERA Yevgeny Ostapov comments, “Because the gas
supplies markets shrunk from 90 billion cubic meters in 1990 to 33
billion cubic meters in 2003 and would decrease further in 2004,
management of the company soberly estimates the situation and seeks
the ways for further development.” ITERA is going to focus on gas
processing and production of raw materials for mineral fertilizers
and chemical industry. The company is studying opportunities for gas
processing in the Krasnodar Territory and Astrakhan Region and is
negotiating on financing of new projects. ITERA also plans to build a
power station in Moldova. In late August, the Board of Directors of
ITERA will meet to approve the new corporate strategy.

Source: Kommersant, 21/08/04