Severstal, a Russian Cherepovets-based steel maker, received a positivereport regarding trial metal supplies for the Sakhalin-1 project, accordingto the statement made during the visit of the representatives of SakhalinEnergy (the general contractor of the project) and Pipe Team, an Italiancompany and the major coordinator of the Sakhalin-2 project, to thecompany. As it was reported earlier, in line with the internationalSakhalin-1 project, in April 2002 Severstal shipped 780 tons of milling tothe Vyksunsk metal works. Senior Sales Manager of Severstal YevgenyChernyakov was quoted as saying that in the event Sakhalin Energy's reportis positive, the potential volume of supplies may reach 150,000 tons fromJanuary 2003 to December 2004. Additionally, during the delegations' visit to the metal works, the partiesconsidered some other production and technological possibilities of thecompany related to the products that may be used in the Sakhalin-2 project.The Sakhalin-2 project envisages the exploration of a number of oil and gasdeposits on the Sakhalin sea shelf. The project will also result in theconstruction of two major sea platforms, sea and earth pipelines,compression facilities, oil and gas pumping stations, an oil terminal, atelecommunications system and other infrastructure facilities. .