Cs “KazTransGas Business Areas

Trunk transportation of natural gas

Gas supply

Resource base

Gas trading operations

Commercialization of gas

Support activities

Intergas Finance BV (100%)

KazTrans Gas LNG (100%)

KTG

AmangeldyGaz (100%)

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KTG Aimak (100%)

Intergas Central Asia, 100%

GazInServis (100%)

Samruk-Energo (5,98%)

KTG Almaty (100%)

KyrKazGas, 50%

Corporate University SK

BMG AG (50%)

KTG Tbilisi (100%)

Asian Gas Pipeline, 50%

Intergas International BV

Project Institution

Active memberships abroad

In May 2006 “KazTransGas” acquired the property complex JSC “Tbilgas” in Georgia. Company examines the gas market of Tbilisi, as promising, having sufficient for guaranteeing the return on of investments and obtaining of profit consumption level and the potential of development. Thus, in Tbilisi created daughterly company “KazTransGas- Tbilisi” with 100% participation JSC “KazTransGaz” in its regulation capital. JSC “KazTransGaz” accepted to itself obligations regarding uninterrupted servicing of the subscribers of Tbilisi city, the guarantee of job placement of personnel, an increase in the wage fund and the most main obligation - rehabilitation of Tbilisi gas-distributing networks.

Earlier in 2004 “KazTransGas”created joint Kazakh-Kyrgyz enterprise “KyrKazGaz” for the uninterrupted guarantee with the natural gas of housing and utilities economies and industrial enterprises of the southern regions of Kazakhstan. CP “Kyrgyzstan”, which formed in March 2004 - achieves the transport of natural gas on the main gas pipe “Bokharan gas-bearing region - Tashkent - Bishkek - Almaty” to the north Kyrgyzstan and the southern regions of Kazakhstan.

Activity of “KazTransGaz” in the part of the acquisition of new projects, including abroad, it is explained by the need for its capitalization, and also as one of the methods of fight with the inflation, which to a considerable degree depends on the grown petroleum incomes of Kazakhstan.

Location of the company - in Almaty, Bostandyk district, Abay, 42.

At present JSC "KazTransGas - Almaty" - a group of companies providing gas supply to the city of Almaty and Almaty region and carrying out the integration of different activities into a single process gas.

1.2 Company's Mission , Prospects and Development Strategy

KazTransGas, the fully-owned subsidiary of the national company, KazMunayGas, given the wide range its business operations from production and transmission of natural gas and generation of power and heat, and thus, eventual positive impact on the economic development of the country and improving the life standard of the significant portion of population in the Republic of Kazakhstan , views its Mission : in further development of the main gas pipelines transmission system and enhancement of gas and energy markets in Kazakhstan ;

Vision

KazTransGas being a highly effective company operating in gas sector and gas transportation industry.

Stemming from its mission and vision, in its development KTG will adhere to the following strategic priorities to:

• Maintain its leading position and maximize income from main gas pipeline transportation business;

• Upgrade the throughput capacity, reliability, security and safety of operations of transmission and distribution gas pipeline networks as the result of rehabilitation, modernization and reconstruction of the operating assets;

• Ensure stable and uninterruptible power and gas supplies in the regions of operations;

Along with that, to focus the efforts and resources on other strategic development areas aimed at:

• building up of the company value;

• enhancement of quality and efficiency of management.

Development of other KTG activities will be carried out on parallel rails complementary with outlined priorities.

The strategic development principles of KTG, as of a vertically integrated holding company, pursue the long-term growth of the company's value and balancing of interests of the stakeholders of the company and other interested parties.

At the same time, the company follows the number of shared strategic goals which achievement implies the coordinated effort of the holding in general, and each of its subsidiaries.

The strategic development area aimed at building up of the company's value determines the choice of the managerial solutions implementation of which will ensure a positive impact on:

• increase of the company's consolidated net income;

• increase of the return on investment;

• growth of the production output;

• establishment of long-term agreements with the clients;

• enhancement of the effectiveness and safety of operations.

The strategic development area aimed at the improvement of quality and efficiency of managemen t will focus KTG's management efforts on one of the most important operational aspects, i.e corporate management. In terms of the internal reforming the company has undertaken improvement of corporate procedures and budgeting system. The purpose of the new phase is to enhance the efficiency of KTG's corporate performance as of the vertically integrated company, by way of:

- enhancing efficiency of the strategic management;

- enhancing efficiency of the operational management;

- development of human resources potential.

Since the very inception of KTG activities, the company has pursued the active social policy remaining the invariable priority in terms of the care of the welfare of own personnel, residents in the regions of operations.

The mission of JSC "KazTransGas-Almaty" and its subsidiaries is the most effective implementation and possible development of gas and gas transportation capacity of Almaty city and region to ensure uninterrupted supply of natural gas to consumers.

The tasks of JSC "KazTransGas - Almaty":

1. Reduce the loss of all their sources (from downtime in terms of money, loss of technological gas, commercial gas loss);

2. Increase the number of consumers;

3. Increase the number of gas sold;

4. Increase the average term agreements with contractors;

5. Increase the share of gas distribution pipelines, the last fault detection;

6. Implement a system of motivation;

7. Increase utilization of production capacity of gas transmission assets (by type);

8. Create an automated system for collecting information;

9. Optimize the process control system transporting natural gas and operating gas networks

The activity of "KazTransGas-Almaty" is based on the following principles:

- ensure trouble free and secure gas sales to consumers at the gas supply system of the city;

- improve the air quality in Almaty at the expense of security of their production processes;

- ensure mutually beneficial relationships with customers and suppliers;

- ensure transparent and reasonable prices for services on the distribution and sale of gas;

- increase profits by minimizing costs;

- emphasis on the prevention of accidents at the sites of gas supply;

- the continuous improvement of the qualification levels of staff;

- modernization of engineering structures and pipelines;

- management decisions based on complete and reliable information on the pipeline and engineering structures in Almaty;

- the use of modern methods of business process management, new technologies and the active participation of qualified personnel in all processes;

- improve profitability by reducing costs;

- increasing capitalization and corporate rating;

effective conduct of business;

- the interests of the sole shareholder of the company;

- improve corporate governance;

- «transparency" of financial and economic activity;

- personal liability of managers for managerial decision-making.

The Group includes the management company and six subsidiaries, the activities are discussed in the following section "Description of technology and production organization." In JSC "KazTransGas - Almaty" is constantly working to improve the management structure of subsidiaries and business units.

With a view to sustainable development of the Company, the management is committed to continually improve the effectiveness of quality management system in accordance with the requirements of international standard DIN EN ISO 9001:2008 in relation to services for transportation and sale of natural gas to industrial enterprises and the population of Almaty city and Almaty region.