Victoria Oil & Gas to Supply West Medvezhye Gas to EnergoPromInvest

Victoria Oil & Gas has signed a framework agreement with OOO EnergoPromInvest for the potential provision of gas from its West Medvezhye license in Russia to a new power station to be constructed in Moscow.

EPI holds the right for construction and operation of a new gas-turbine heat and power station in the Scherbinka suburb in the south-west region of Moscow. The Power Station will have the capacity to generate up to 210 MW of electricity and 300 Gkal/h of heat and will require an estimated 15 billion cubic feet of gas per annum.

The power station is expected to start limited operation in 2007 with full electric and heat capacity anticipated by the third quarter of 2009. Under the terms of the Agreement, Victoria will enter into a gas off-take contract with EPI to supply 100 per cent of the Power Station's gas requirement for a minimum of two years when West Medvezhye is in commercial production. The gas will be acquired at the prevailing market price.

As an industrial consumer, EPI will have the right to buy gas from the field and Gazprom shall be required to transport it to the power station, subject to the gas meeting designated technical standards and available pipeline capacity.

Commenting today William Kelleher Managing Director said, "In signing this agreement we have secured a future market for our prospective gas production and access to Gazprom's pipeline system. The construction of the Scherbinka power station will dovetail with the development of our West Medvezhye asset and we are proud to be involved with such an important project for the city of Moscow".