The company said $50m of the purchase price is its capital contribution. The remaining financing will be arranged by the US bank Lehman Brothers. LUKoil will use the gas stations as collateral for the 6-year loan.

Annual sales from the gas stations total 6bn liters of oil products, which almost doubles LUKoil’s market share in the north-eastern part of the US. The deal meets the company’s investment criteria and is in line with the strategy for the development of the most profitable retail sector of oil product sales in the “Processing and Sales” segment.

The penetration of new markets will give a boost to LUKoil’s projects in the Timan-Pechora region, where it plans to more than double its oil production.

In the short term, gas stations on the US market will enable the company to use a terminal in Vysotsk, the Leningrad region (currently under construction), more effectively. Using this terminal, LUKoil will be able to significantly increase its exports to the United States and Europe and cut export transport costs by $40m to $50m a year.

The terminal in Vysotsk is designed to handle oil products, including black oil, diesel fuel, gasoline and lubricants. At the initial stage, it will be able to receive tankers of 20,000 deadweight tons, and up to 80,000 after construction is completed. The first terminal facility, with a capacity of 2.5m tons, is expected to be put into operation in the spring of 2004.

LUKoil has more than 4,700 gas stations across the globe, more than half of which are located in the United States. In 2000, the company acquired about 1,300 gas stations in thirteen states in the north-east of the United States.