In a conference call with international journalists Gazprom Deputy CEO Alexander Medvedev said:

• Ukraine has now shut down all the major export pipelines going through the country which enable gas to transit to Europe.  The fact that Naftogaz Ukrainy has taken this action was confirmed by Austrian and Slovak operators. At the moment any gas delivered to Ukraine will not reach European customers as the pipeline routes are closed.

• We now ask Ukraine to open the pipelines. If Ukraine does not execute this then there is no point in pumping gas through the country despite all our efforts. We are ready to start pumping as soon as the pipeline is open.

• Gazprom is now attempting to mitigate for this shortfall  to its European customers  from  its European underground storage facilities , by increasing supplies through Yamal-Europe,  Belarus  and Blue Stream  and by buying gas on the spot market.

• These alternative sources of gas do not compensate fully for the Ukraine shortfall. The normal level of exports to Europe in winter is up to 450 million cubic metres of gas per day. Today we have delivered 170 million cubic metres of gas to Europe.

• Gazprom does not currently need to reduce production as it is making use of its extensive underground gas storage facilities within Russia.  It will continue to seek to manage the system to avoid any shut-ins as this would impact on the company's future production profile.

• We still have not  been able to have any negotiations with Naftogaz since Dec 31st  but we are and have been ready to negotiate day and night.

• Gazprom has mandated independent observers to verify flows at Russian & Western European stations for some time but Ukraine has so far refused entry to the stations in its territory.

• We had offered Ukraine a fixed price of $250 per 1,000 cubic meters of gas for 2009, which was rejected. If Ukraine was to pay European market prices for gas deliveries at this point it would pay $450 per 1,000 cubic meters (the current European market price.) If Ukraine bought Central Asian gas from us at the Russian-Ukrainian border that price would be $380 per 1,000 cubic meters - both of these prices are based on a pricing formula which takes into account the oil price among other factors and will go down at the end of the second quarter 2009.