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FINLAND TO RECEIVE MORE RUSSIAN GAS

March 28, 1994

Finland's Neste Oy and Russia's Gazprom have formed a joint venture company to supply an increasing volume of Russian gas to Finnish consumers. Effective May 1 the new venture company, called Gasum Oy, will take over the activities of Neste's natural gas supply division. Under the agreement, Gazprom has taken a 25% interest in Gasum for 250 million Finnmarks ($45.6 million) in cash. Neste will own a 75% interest.

Finland's Neste Oy and Russia's Gazprom have formed a joint venture company to supply an increasing volume of Russian gas to Finnish consumers.

Effective May 1 the new venture company, called Gasum Oy, will take over the activities of Neste's natural gas supply division.

Under the agreement, Gazprom has taken a 25% interest in Gasum for 250 million Finnmarks ($45.6 million) in cash. Neste will own a 75% interest.

"The holding will mean a stronger commitment by Gazprom to development of the Finnish natural gas market and increasing transmission capacity between St. Petersburg and the Finnish border," Neste said.

Neste is Finland's sole gas supplier, importing 2.9 billion cu m/year from Gazprom.

The new venture agreement is based on a 20 year supply contract, which Neste estimates could boost Finland's gas imports to more than 4 billion cu m/year by 2000.

Neste took the initiative to invite Gazprom to take an equity stake in Finland's gas business.

A Neste official said Finland's gas distribution network is running at fun capacity during winter months. The company plans to increase grid capacity during the next 5 7 years to handle estimated demand of 4 billion cu m/year.