OREANDA-NEWS. March 16, 2012. JSC  NOVATEK (“NOVATEK” and/or the “Company”) announced today that JSC  Russian Railways (‘Russian Railways’) CEO Vladimir Yakunin and NOVATEK CEO Leonid Mikhelson signed a Strategic Partnership Agreement (‘the Agreement’) until 2020.

The Agreement emphasizes the mutual cooperation between the two companies relating to transportation of liquid hydrocarbons from NOVATEK’s wholly-owned Purovsky Processing Plant (“Purovsky Plant”) and the modernization and development of railway infrastructure to increase capacity on the “Limbey – Surgut – Tobolsk” section of the Sverdlovsk railways.

The Agreement provides for the transport of 100% of the volumes produced at the Purovsky Plant (stable gas condensate and LPG) and takes into consideration the expected growth in production capacity and the possibility to increase transportation capacity up to 12 million tons per annum.

The Agreement stipulates that Russian Railways is responsible for increasing the capacity of the “Limbey – Surgut – Tobolsk” section at an estimated cost of RR 41.3 billion, of which RR 30.5 billion will be financed by NOVATEK according to the approved financing and construction schedule. NOVATEK’s investment in the infrastructure development will be reimbursed against future transportation volumes as agreed by the parties.

JSC  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 83% of Russia's natural gas production and 16% 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”.