Address to Shareholder

Chairman of the Gazprom Board of Directors Viktor Zubkov

 

Chairman of Gazprom's Management Committee Alexey Miller


Dear Shareholders!

The global energy industry knows many large companies. However, not all of these are capable of implementing unprecedented projects. This is the job for those companies, that along with their large scale deliver high performance efficiency, well-designed strategies and active implementation of cutting-edge technologies. Gazprom is the company to deliver all of the above. This is clearly demonstrated by the Company's achievements in the reporting year, and many of these are landmarks for the national and international gas industry.

In 2012 Gazprom commissioned a large Bovanenkovskoye field at Yamal Peninsula. Now Russia’s map features a new natural gas production center, to be the country’s largest. Gas from Bovanenkov skoye field will make its way to customers via a unique gas transportation system. Up to this day, no other country has ever implemented such a giant project this far North. Gazprom gave a start to the new era in the history of the global gas industry.

Gazprom is the only Russian company capable of creating a modern gas industry sector in the country’s East. Under the Eastern Gas Program, we have already set up two gas production centers, in Sakhalin and Kamchatka, Yakutia is next in line. In 2012 the Company made the final investment decision to proceed with development of Chayandinskoye field, crucial for our Yakutia gas production center. Supplies from the new gas production center will be delivered to customers via a new gas transportation system to be built, the name “Power of Siberia” was selected for the system in a Gazprom-initiated contest. The development of Yakutia gas production center, based on Chayandinskoye field will launch large-scale development of gas refining in Russia’s East.

Speaking of unique features of Gazprom, one cannot but mention that Gazprom is the only company in our country to carry out such active and systematic development of such a major socially significant project, as development of gas distribution infrastructure. The unprecedented investments of Gazprom into development of gas distribution infrastructure in 2012 – about RR 33.8 bln – yielded excellent results: natural gas for the first time came to 429 communities.

The program of gas distribution infrastructure development has gained even more importance: starting from this year, it also includes Gazprom’s efforts to expand use of natural gas vehicle fuel. In 2012 we established a special company with the key purpose of coordinating efforts of gas producers, automotive manufacturers and constituent regions of the Russian Federation in this area. Natural gas vehicle fuel encompasses many aspects – optimization of road transportation costs, improvement of environmental conditions and and is one of the most promising segments of the Russian gas market.

Gazprom is not only a global energy Company, it is also one of the major suppliers of natural gas on the planet, and it continues to focus on further diversification of deliveries of this fuel to its international customers. In 2012 Nord Stream pipeline reached its design capacity, and it is the first gas pipeline in history to directly connect gas transportation systems of Russia and Europe. We launched construction of South Stream, which is the largest investment project in Europe. The starting point of South Stream, Russkaya compressor station, will be the most powerful station in the world. When South Stream reaches its designed capacity, Gazprom’s transit risks for supply to its European consumers will be brought down almost to zero. Being the only LNG manufacturer in Russia, in 2012 Gazprom performed the world’s first shipment across the Northern Sea Route – the shortest route between Northern Europe and North – East Asia.

Developing its sideline business areas, Gazprom is implementing unique projects as well. In 2012 we launched a combined cycle gas turbine unit at Kirishskaya GRES. This is the largest thermal generation facility, commissioned in Russia during the last 30 years, and the most productive combined cycle unit in the country. Commissioning the unit enabled Gazprom to meet over a half of its new generation commitments.

Gazprom’s success is achieved by our outstanding efforts. Daily hard work of many thousands of Gazprom’s employees made it one of the most reliable and dynamically developing global energy companies. And this work is focused on our future. Even today our commitment secures reliability of future supply of key energy resources to domestic and international customers, ensuring dynamic development of Gazprom and confidence of our investors.