1. Better Energy, Better World Cooperation in Natural Gas Industry between Russia and Korea Sept. 2004 Better Energy, Better World

2. Contents 1. Introduction of KOGAS 2. Cooperation between Russia and Korea

3. Better Energy, Better World Introduction of KOGAS KOGAS Facilities for National Pipeline System Tongyoung Terminal Pyeongtaek Terminal Incheon Terminal Seoul ◈ Established by the Government in 1983 ◈ KOGAS Main Facilities - 3 terminals and 2,500 km Transmission Network  Intention to Implement International PNG Project - diversification and security of energy sources

4. Better Energy, Better World (Unit : 1,000 tons) The largest importer, accounting for 16% of LNG trade in the world The largest importer, accounting for 16% of LNG trade in the world Natural Gas Consumption in Korea

5. Better Energy, Better World ◈ Long-term supply contracts with nine global suppliers in six countries Oman Indonesia Australia Brunei Malaysia 4.1 mt/yr 1.2% equity participation 5.3 mt/yr 4.0 mt/yr 0.7 mt/yr 0.5 mt/yr Qatar 4.8 mt/yr 3% equity participation Secured Energy Supply Sources

6. Better Energy, Better World Balance between Contracted Volume and Demand Year200520062008201020152017 Shortage + PNG1.42.15.65.314.619.6 Unit: Million Ton

7. Better Energy, Better World  Security of Stable Long Term Supply KOGAS Policy to Import Natural Gas KOGAS is under bidding process to buy 5 million ton LNG/year from 2008.  Competitiveness against Alternative Sources - Price & Flexibility of Supply Conditions  Diversification of Supply Sources  Joint Investments for Mutual Benefits

8. Better Energy, Better World 2. Cooperation between Russia and Korea

9. Better Energy, Better World Signing Ceremony of An Agreement Major Milestones: Nov. ’00: An Agreement Nov. ’03: IFS Completion The target delivery year : 2008 IFS Report is now under review by representing Party’s government. Pipeline Route in the Russian Territory is being reconsidered. Irkutsk PNG Project

10. Better Energy, Better World 1. No Cross Border Infrastructure - Long Distance from the Fields to Markets - Huge Amounts of Investment Cost Challenges to Implementation of the Project 2. Requirement of a Large Scale Export Volume - Enlargement of Neighbor Country's Gas Demand 3. Development of Sustainable Engine to implement the joint projects - Strong Government Support - The Well-matched Program between Supplier and Importers

11. Better Energy, Better World Provision of Gas Market to develop the Gas Reserves - Availability between LNG and Pipelined Natural Gas Joint Investment with the Russian Partners Joint Preparation of the Comprehensive Program to realize the Projects - Gazprom and Companies appointed by the Russian Federation KOGAS is ready to cooperate with the Russian Partners to implement the Joint Statement agreed in both Summit held on the 21th of September. Possible Role of KOGAS for Cooperation

12. Better Energy, Better World Thank You !!! Better Energy, Better World