OAO Severstal announced the conclusion of new mid-term natural gas supply contracts with OAO NOVATEK for several Severstal Russian Steel division enterprises. The natural gas supply contracts have been signed for a period of 5 years effective January 1st 2013 with the total volume of natural gas supplied over this period estimated at approximately 12 billion cubic meters.

According to the gas supply contracts, NOVATEK will commence delivering natural gas to Cherepovets Steel Mill, OAO Severstal metiz and Severstal SMC.

Mr Alexander Grubman CEO of Severstal Russian Steel division said that "This contract supports Severstal's strategy to diversify supplies in order to strengthen the Company's financial stability."

Mr Leonid Mikhelson chairman of NOVATEK's Management Board said that "The conclusion of these gas supply contracts is another step in the implementation of the Company's commercial strategy, providing for the increase in the proportional share of end-customers in our total sales mix. Severstal is a reliable gas consumer and we are happy to establish partnership between our companies."

Source - OAO Severstal

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