EMFESZ Ltd.

EMFESZ Ltd. was born of the recent liberalization of the European natural gas trade. The firm was chartered in 2003 upon opening of the national market to independent companies. EMFESZ started activities in September 2003, based on the capital stock of 552 million Hungarian Forint (currently about US$2.86 m).

EMFESZ's primary business involves the continuously expanding Hungarian natural gas market, which is characterised by a high gas pipe penetration and seasonal consumption trends.

Currently, some 40% of all energy consumed in Hungary comes from natural gas. About 75-78 percent of all gas used here is imported. Natural gas needs are covered primarily through the "Gazprom."

Therefore import of Central Asian gas to Europe through our company constituted a significant milestone in the diversification of energy sources, the task set forth by the EU and the European Energy Charter.

In accordance with regulations of the European Union, first steps have been taken in Hungary in the past few years to create a free market in natural gas, which will be complete next year. Presently we can proudly claim 70% of all free market consumers and about the same share of the total volume provided to them.

EMFESZ has now about 500 consumers. Last year we delivered 2.3 billion m ³ , out of which nearly 1 billion m ³ was provided directly to the competitive market. This year the company plans to further increase sales and cover nearly 20% of the Hungarian gas consumption.

The product of ours has Central Asian, first of all Turkmen origin. Natural gas travels over several thousand kilometres across five states, before it finally reaches the Ukrainian-Hungarian border. There we receive the gas from the giant RosUkrEnergo AG (RUE), our strategic partner.

Our primary goal is to provide quality service, consistently competitive prices, and favourable terms of payment to all our customers. EMFESZ has been active for nearly three years, with gas supply overseen by a team of highly qualified professionals They use the 24-hour dispatch centre with an advanced IT platform. Thus, our business offers the background and references necessary to prepare consumers currently supplied by public utilities to move onto the competitive market, and to sell them natural gas under favourable terms.

As a result of good strategy EMFESZ Ltd. managed to increase total sales almost 15 times in 2005 as compared to the previous year and made up US$437.6 million. Further step was made in 2006, when with the total sales of US$778 the company was ranked 41st on the Hungarian Top 50 list.

EMFESZ is on the road to become a comprehensive energy market player. We started trading electricity this year and announced a plan to build up a huge gas fueled power plant complex in the underdeveloped eastern Hungary with an output of 2400 megawatts. A new Romanian subsidiary was launched recently to join the foreign operations started earlier by EMFESZ Polska.

We strongly believe that this unique take-off makes EMFESZ Ltd. a genuine Rising Star of the World Energy market.

Statistics

• Turnover: US$778.6 m
• Gas sales: 2.3 bcm
• Capital stock: $2.8 m
• Customers: 500
• Employees: 35

István Góczi CEO, EMFESZ Ltd.