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NOVATEK Chairman of the Management Board Leonid Mikhelson: I would like to once again thank you very much for moving forward with the reverse excise tax on LPG [liquefied petroleum gas]. As you remember, the issue with ethane was resolved in April during a conference we had, and in October, it was adopted.

I would also like to thank Mr Alexei Miller [Gazprom Chairman of the Management Committee]; the Amur GCF [gas chemical facility] received not only ethane but also nearly a million and a half tonnes of LPG, thus turning it into a different project with a really good, different economy. Maybe Mr Konov will say a few words as to how much bigger it is.

Vladimir Putin: All right.

SIBUR Holding Chairman of the Management Board Dmitry Konov: We aim at a capacity of 2.7 million tonnes a year, which is 35 percent more than the capacity here. Meanwhile, we see from the capital expenditures that the cost will be about the same as it is with ZapSibNeftekhim. Thus, the project appears considerably better in terms of capital cost per tonne. We are taking the decision even in the tough conditions we are facing now. Plus the reverse excise tax and, obviously, the greater capacity from Gazprom, all that was extremely useful for us.

We also see the progress of the Amur GPP [gas processing plant]. It is moving ahead on schedule, and provides us with raw materials, which are needed to develop the petrochemical industry practically side by side with the commercial market – near China. We are pursuing the project together with Sinopec.

Vladimir Putin: In what way do they participate?

Dmitry Konov: They provide 40 percent of the financing. They are a 40-percent shareholder in this project.

We are waiting for a decision of the Commission on Foreign Investment to finalise the deal.

Leonid Mikhelson: Excuse me, Mr Konov, at present ZapSibNeftekhim exports over half of its output. Meanwhile, consumption in Russia is on the rise, while the emerging markets are the Asia-Pacific region and China. Therefore, it is perfect timing for the launch of the Amur GCF.

And a request, Mr President. An intergovernmental agreement was signed on Yamal LNG, which is also a huge Russian-Chinese project. Now the Chinese side is also expressing a desire to perhaps have an intergovernmental agreement signed on this project, too.

Vladimir Putin: An agreement on the Amur GCF? Why not?

Leonid Mikhelson: Yes, it would give the project international standing

Vladimir Putin: Fine, submit the proposal, agreed.

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