Addressing progress with updated Concept for the Gazprom’s participation in Russian regions gasification

RELEASE

The Gazprom Regional Policy Commission has convened a regular meeting moderated by Valery Golubev, Deputy Chairman of the Company's Management Committee and the Commission Chairman.

The Commission members took note of the information relevant to implementation of the updated Concept for Gazprom's participation in Russian regions gasification approved in November 2009. It was highlighted that draft Gasification Accords had been elaborated for 20 Russian Federation constituents over the elapsed period. Accords are signed with two of them, while Accords with the rest are pending approval by regional authorities. In addition, Gazprom has elaborated action plans on gas supply and gasification of six Eastern Siberian and Far Eastern regions as part of the Eastern Gas Program.

Progress has been noticed in natural gas utilization as a transport fuel. For instance, in 2010 Gazprom signed the relevant agreements with the Kaluga, Orel and Tambov Oblasts.

Particular attention was paid to the projects for autonomous regional gasification with the use of liquefied and compressed natural gases as well as liquefied petroleum gas. The first projects of this type are to be launched in the Perm Krai and the Republic of Buryatia.

Moreover, the Commission members addressed the ways of enhancing the gasification efficiency, in particular, the new techniques of assessing the load on gas laterals and inter-settlement gas pipelines.

Background

The Concept for Gazprom's participation in Russian regions gasification was first approved in 2000. The Company regularly updates the document in line with the gasification results achieved and the need to meet new goals in this area.

The Concept defines the Company's major activity areas in the gasification and natural gas utilization sectors, the practice of gasification projects implementation in compliance with the Russian legislation in force. The Concept lays the foundation for developing specific programs, organizational arrangements and regulatory documents governing Gazprom's participation in the gasification process. It is also intended for harmonizing the interaction between Gazprom and regional authorities and coordinating the efforts in order to secure the most efficient utilization of resources for the gasification.

The previous Concept was adopted by the Gazprom Management Committee on November 30, 2009. It divides the Russian regions into three groups depending on the gas infrastructure development level, stipulates three-year gasification planning for each region and introduces new safety standards. Special attention is paid to gasification of population centers that are sparsely inhabited or detached from gas trunklines. This is especially important for the rural area.

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