Novatek Expands Production Capacity

Novatek plans to increase the production capacity at its Khancheyskoye field and also carry out infrastructure improvements at its East Tarkosalinskoye field. Work will be performed from the 10th to 17th of October 2006, during which time production will be temporarily suspended at the two fields.

The production stoppage will enable the Company to connect a second gas pipeline from the Khancheyskoye field to infrastructure at the East-Tarkosalinskoye field. The work will include, hydraulic testing and pressure monitoring of pipelines and equipment. The infrastructure expansion is part of the second phase of development at the Khancheyskoye field. Upon completion of the second phase, the production capacity at the Khancheyskoye field will increase to 4.9 billion cubic meters of natural gas per annum.

Novatek will also make improvements to the low temperature separation unit (LTSU) at the East-Tarkosalinskoye field by connecting an air cooling system that will enable the LTSU to reach lower temperatures and improve the quality of separated gas. Work is also scheduled to overhaul the de-ethanization plant located at the East-Tarkosalinskoye field to enhance the reliability and quality of its processing capabilities to accommodate future production throughput. The plant processes gas condensate produced at both the East-Tarkosalinskoye and Khancheyskoye fields.