NOVATEK is Russia’s largest independent natural gas producer and the second-largest natural gas producer in Russia after Gazprom. The company is principally engaged in the exploration, production, processing and marketing of natural gas and liquid hydrocarbons and has over 15 years of operational experience in the Russian oil and natural gas sector. In 2009 and the first nine months of 2010, NOVATEK accounted for approximately 6% of the natural gas produced in Russia, providing approximately 10% and 11%, respectively, of total natural gas deliveries through the UGSS to the domestic market.

NOVATEK’s principal operating areas are concentrated in Yamalo-Nenetsk Region in Western Siberia. Yamalo-Nenetsk Region is the most significant gas producing region in Russia, accounting for approximately 83% of Russia’s natural gas production and approximately 16% of global natural gas production.

NOVATEK is currently required to sell 100% of its natural gas to customers in the Russian Federation, which are mainly power generation companies, industrial users, regional gas distributors and wholesale gas traders. The company generates revenues primarily from natural gas and gas condensate sales and, to a lesser extent, sales of other liquid hydrocarbons.