ARMROSGASPROM TO INVEST 21.7BLN DRAMS IN EXPANSION OF NETWORK IN ARMENIA BY 2010

ARKA
March 26, 2008

YEREVAN, March 26. /ARKA/. "ArmRosgasprom" is to invest 21.7bln Drams
in expansion of its gas and transport network in Armenia by 2010.

These investments are provided for under the company’s investment
program for 2008-2010 approved on March 7, the Press Service for the
company reported.

89.1% of the amount (19.36bln Drams) will be directed to the expansion
itself and the remaining funds (488.1mln Drams) will be spent on
repair of the damaged sections of the gas pipeline.

The works planned will allow increasing the reliability of operation
and reduce breakdowns, says the report.

The Press Service reported that "ArmRosgasprom" initiated inspection
of the pipeline to reveal corroded sections as the trunk pipelines
are extremely worn out due to long-time operation. In particular, 250
kilometers of trunk pipelines and 400 kilometers of gas distribution
network are to undergo diagnostic inspection.

About 176 kilometers of distribution pipelines and 4.5 kilometers of
500mm diameter trunk pipelines are to be replaced. Among other works
to be done are constructing of a new 1.4 kilometer-long pipe-bend,
establishing a gas treating plant at the border of Armenia and
replacing technological equipment on 20 gas distribution plants.

On March 7 the Public Services Regulatory Commission of Armenia
approved the investment program of "ArmRosgasprom" closed joint
stock company in Armenia for 2008-2010 for total of 45,188.5mln Drams
(without VAT).

"ArmRosgasprom" enjoys the monopoly for supply and distribution of the
Russian natural gas on the domestic market of Armenia. The company was
established in 1997. Its capital is $580mln currently. The shareholders
are "Gasprom" open joint stock company (57.59%), Armenia’s Ministry
of Energy (34.7%) and "Itera" oil and gas company (7.71%).