In accordance with the PSA for the Kandym-Khauzak-Shady-Kungrad project, LUKOIL Overseas established LUKOIL Overseas Supply & Trading Ltd., a special-purpose marketing company.

The company is created with the intention to facilitate the sales of crude oil and gas condensate produced under the project (natural gas condensate, sulfur, broad fraction of light hydrocarbons, oil, gas condensate and their refined products) with maximum profitability for the PSA participants - Government of the Republic of Uzbekistan, LUKOIL Overseas and Uzbekneftegaz national holding company.

The company’s tasks are to carry out market research and to conduct negotiations with the potential buyers of the products, to enter into and to perform contracts for the product sales, to manage joint commodity and cash flows and bank accounts, as well as to distribute the sales revenues among the PSA participants.

In order to exercise its functions the company branched out and registered the representative office in Tashkent, that has already started the activities in the sphere of accommodating and awarding contracts for transportation, refining, storage, transshipment and sales of products. The first sales of crude oil and gas condensate are planned for the end of the current year and will be synchronized with the commissioning of the Khauzak gas condensate field in the Bukhara Region.

The total volume of the produced natural gas condensate will be exported beyond the borders of the Republic of Uzbekistan via the trunklines of Gazprom. The initial gas condensate export volume will amount to 3 billion cubic meters per annum. After the completion of the construction and commissioning of the Kandym gas processing complex and attaining of the project’s peak production by 2012-2013 the natural gas condensate export volume will increase to 12 billion cubic meters per annum.

At the initial stage of the project oil and gas condensate will be sold at the domestic market of the republic. In the mid-term period, the marketing company is planning to carry out the processing of oil and gas condensate at the oil refineries of Uzbekistan with the further sales of final oil products for export and at the domestic market of the country.